How does a business report digital asset transactions?

Digital assets, including cryptocurrencies, must be reported if received, sold, or exchanged for products or services in the course of business. Many taxpayers forget to report digital asset transactions because they don’t involve traditional currency, but all business-related transactions must be reported as income. 

Example: A customer's S corporation received 0.5 Bitcoin for consulting services. This transaction must be reported as income at the corporate level. 

Follow these steps to record digital asset transactions:

1. Locate Business Info and select About Your Business. 
2. On the 1st Confirm Your Business Information screen, select Continue.
3. On the 2nd Confirm Your Business Information screen, select Continue.
4. Answer any prompts with your business details.
5. On the Payments Requiring a 1099 screen, select No.
6. On the Any Digital Asset Transactions screen, select Yes.
7. Follow the prompts to enter your digital asset transaction details.