The IRS Question About Crypto on Form 1040

Near the top of Form 1040, just below your name and address, there's a yes/no question that asks whether you received, sold, exchanged, or otherwise disposed of any digital assets during the year.

Most people breeze past it, but answering incorrectly is a problem — checking "no" when you should have checked "yes" can be treated as a false statement on a federal tax return.

You're generally required to check "yes" if you sold crypto, traded one coin for another, received crypto as payment, or earned staking or mining rewards.

You can safely check "no" if all you did was buy and hold crypto, move it between your own wallets, or receive it as a gift without selling it.

The question has been on the form since 2019 and gets more prominent each year — the IRS is using it to identify taxpayers who may have unreported crypto income.