If you invest in or use virtual currency, then take your time on the new Schedule 1 of your 2019 tax return. There is now the following required YES or NO question regarding Bitcoin and other virtual currency.
“At anytime during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”
The IRS treats virtual currency like property and there can be gain/loss each time it is sold/exchanged. So if you check YES and sold/exchanged virtual currency in 2019 then you should be reporting transactions. If you check YES and did not sell/exchange in 2019, be sure to keep records and track the purchase price so you can calculate your gain/loss in future years.
Also some of these transactions are now being reported to the IRS on 1099 and the IRS has subpoenaed several crypto exchanges to get account information. So be careful this year on this new questions and do not let this get checked as NO if you had any virtual currency transactions during 2019.
As I reported late last year, early drafts of Form 1040 reflected a new question on the top of Schedule 1, Additional Income and Adjustments to Income (downloads as a PDF).