Digital assets and taxes: what every tax pro needs to know

For the past few years, taxpayers have been required to report income from digital assets, so you need to know what to do if your clients have income from those assets and be able to explain what could happen if they fail to report it.

Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you can access the full recording and the entire list of Q&As.

Q: Do clients who only buy crypto receive rewards?

A: Typically, rewards are earned from staking. Simply purchasing crypto does not generate rewards.

Q: How do we know if a client received an airdrop? Do they get a special form?

A: No, there is no specific form that a taxpayer receives when they get an airdrop.

Q: Is there any special questionnaire for digital currency?

A: It is recommended to add additional questions to your client questionnaire or intake form for clients involved in digital asset activities.

Q: Can we rely on statements from Robinhood or Schwab?

A: It is best practice to verify the transactions independently. While statements are helpful, you should still confirm the information.

To learn more about digital assets, you can watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial.