What is the digital asset question on Form 1040?

The digital asset question on Form 1040 asks whether, at any time during the tax year, you received a digital asset as a reward, award or payment, or sold, exchanged or otherwise disposed of one. Every person filing Form 1040 or 1040-SR must check Yes or No. The same question appears on other returns, including Forms 1040-NR, 1041, 1065, 1120 and 1120-S.

Do I check Yes for digital assets?

According to the 2025 Form 1040 instructions, you check Yes if during the year you:

• Received digital assets as payment for property or services, or as a reward or award.
• Received new digital assets from mining, staking or similar activities, or from a hard fork.
• Sold a digital asset, exchanged one digital asset for another, or used one to pay for property or services.

The IRS digital assets page adds that paying a transaction fee in crypto, or transferring ownership of a digital asset, also counts. For background on what qualifies, see what is a digital asset.

When can you answer No to the digital asset question?

The instructions say you can generally answer No if your only activity was:

• Holding digital assets in a wallet or account.
• Moving digital assets between wallets or accounts you own or control.
• Buying digital assets with US dollars or another real currency, including through apps such as PayPal or Venmo.

Moving coins between your own wallets can still lead to a Yes if you paid the network fee in crypto, because spending crypto on a fee is a disposal.

What do the Form 1040 instructions say about reporting after you answer?

Answering Yes does not by itself create tax. It tells the IRS you had a reportable event. The instructions point to where the details go:

• Sales and trades of crypto held as a capital asset go on Form 8949, then Schedule D. Form 8949 now has separate boxes for digital asset transactions.
• Crypto received as wages goes on line 1a, and crypto earned in a business goes on Schedule C.
• Other ordinary income from digital assets goes on Schedule 1.
• Gifts of crypto may require Form 709.

The full set of forms is covered in crypto tax forms.

Does the answer depend on getting a Form 1099-DA?

No. The instructions state that you must answer the question whether or not you received a Form 1099-DA. Brokers began reporting gross proceeds on Form 1099-DA for transactions on or after January 1, 2025, with cost basis reporting starting for transactions on or after January 1, 2026. Small transactions can still trigger a Yes; see do you have to report crypto under $600.

This guide reflects IRS materials available as of October 2026.

Rules differ by country and change often. Check the tax authority or a qualified professional for your own situation.