Did either of you acquire, sell ...any virtual currency in 2021 question

[edulinka]

I just acquire some bitcoins from Coinbase and did not sell it. What should I say? Yes or NO ? 

[TeresaM]

Please answer "Yes". If you acquired any virtual currency in 2021, the IRS will want you to answer "yes" to this question, even if it is not a taxable event this year. This question is right on Form 1040, so it is included in everyone's return.

Rules for the taxation of cryptocurrency are still evolving, so this is different than the question last year.  For more information, please see this IRS frequently asked question page. IRS Virtual Currency FAQs

[edulinka]

Hi I lost this question in Turbotax. Where I can find it there? Any details where to look?

[DMarkM1 · Accepted solution]

The virtual currency question is found after entering income and clicking "Wrap up income" at the bottom the page.  There may be other follow on questions prior to arriving at the cryptocurrency question.  

NOTE:  You will answer "Yes" or "No" depending on how you acquired the currency and what you did with it.  The IRS FAQ will guide you.  I draw your attention to Q5.  If you simply purchased the virtual currency with real currency and did nothing else you can answer "No."

[edulinka]

Thanks but can you privide me steps to get back to this question. I can't figure it out :(

[edulinka]

I see mix answers YES and NO. For NO I see answer on IRS website ( I guess it is right) and for YES  I have crypto currency . So YES or NO ?  🙂

[DMarkM1]

Yes.  It's in the "Federal" interview in the "Income" tab.

1. Click "Federal" in the left hand menu
2. Click "Income" tab at the top of the page
3. Scroll to the bottom of the income summary page
4. Click "Wrap up income" 
5. Click "Continue" until you arrive at the "Virtual Currency" question

[Vanessa A · Accepted solution]

As @DMarkM1  mentions above, it depends on how you acquired the crypto.  If you purchased it you will answer no.  If you received it in exchange for services or as payment for an item, then you will answer yes. 

If you received it as some type of payment, this triggers a taxable transaction just like if you received cash from someone for mowing their lawn.  This would need to be reported.

However, if you simply bought it like you would buy stocks, this is not a reportable transaction since you have not yet sold it, you have only put money out, you have not received any yet. 

@edulinka