I withdraw money from my 401K and reinvested in digital assets, do I still claim that as income?

[ronald_chombo]

Fidelity does not have an option for digital assets investments so I withdraw part of my 401K and invested in Crypto markets. Since I transferred the investment, is the withdrawal still considered income even though I personally did not use it but rather reinvested it.  I feel like this is similar to my IRA account I created within Fidelity... the only delta is that I did not actually withdraw the funds but simply transferred them to a self managed account much like my digital assets.

[HelenC12]

Are the crypto markets you invested in qualified retirement accounts? 

If you did not rollover the 401(k) retirement income into another retirement plan, then yes, it's taxable and there may be an additional penalty, depending on your age. To enter your 1099-R, click here.

Related information:

• Where do I enter an IRA rollover?
• An Early withdrawal From Your 401(k): Understanding the Consequences