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January 29, 2022
Question

What If I said yes on "did you buy/sell crypto" because I got $50 on PayPal. Realised the irs says to put no if buying that way. I forgot to change back. Already accepted

  • January 29, 2022
  • 1 reply
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It has already been accepted. Will it get kicked back? Will I have to ammend etc..?

1 reply

January 31, 2022

The best approach is to amend your return so as to ensure that your return is accurate in all respects.   Upon signing your return you are acknowledging under penalties of perjury that, to the best of your knowledge, the return is true, correct, and complete.  Thus, if you believe that your response to the crypto question was not accurate, it is best to change it so it is accurate.  

 

In the prior year, the IRS' cryptocurrency question arguably encompassed some non-taxable transactions, like simply holding crypto or sending holdings from one digital wallet to another.   The change in wording for 2021 translates to a narrower set of transactions.  Thus, it would appear for 2021, the IRS is more interested in asking about things that could lead to taxable events. 

 

Should you decide to amend, you will likely be completing Part III of Form 1040-X which is the part of the form where you can explain why Form 1040-X is being filed.  It does not appear based on what you have asked, that your actual number entries on your return will change and thus, there would be no change to your tax due amount or tax refund amount, whichever applies.  

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