You have a financial interest but the question refers to receiving, selling and disposing of the digital asset.
The digital asset question on the 2023 Federal 1040 tax return is:
At any time during 2023, 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)?
This IRS document outlines these circumstances when you should select "Yes" to the 2023 Federal 1040 tax return digital asset question.
Normally, a taxpayer must check the "Yes" box if they:
- Received digital assets as payment for property or services provided;
- Received digital assets resulting from a reward or award;
- Received new digital assets resulting from mining, staking and similar activities;
- Received digital assets resulting from a hard fork (a branching of a cryptocurrency's blockchain that splits a single cryptocurrency into two);
- Disposed of digital assets in exchange for property or services;
- Disposed of a digital asset in exchange or trade for another digital asset;
- Sold a digital asset; or
- Otherwise disposed of any other financial interest in a digital asset.
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