Just like previous filing years, taxpayers must report all digital asset-related income when they file their 2024 federal income tax return. A digital asset is property that is stored electronically and can be bought, sold, owned, transferred or traded. Examples include convertible virtual currencies and cryptocurrencies, stablecoins and non-fungible tokens (NFTs).   

If a taxpayer had digital asset transactions last year, they should be sure to keep records that prove their purchase, receipt, sale, exchange or any other disposition of the digital assets and that includes the fair market value, as measured in U.S. dollars of all digital assets received as income or as a payment in the ordinary course of a trade or business.  

When filing 2024 federal income tax returns, taxpayers will be asked to answer “Yes” or “No” to the following question: 

“At any time during the tax year, did you:

(a) receive (as a reward, award or payment for property or services); or   (b) sell, exchange or otherwise dispose of a digital asset (or a financial interest in a digital asset)?” 

Taxpayers should be prepared to answer the question by reviewing the digital assets landing page and FAQ available on IRS.gov. In addition to checking the “Yes” box, taxpayers must report all income related to their digital asset transactions. Information on how to report digital asset transactions, including calculating capital gain or loss, determining basis and reporting the income on the correct form can also be found on the digital assets landing page.