Back in October 2019, Kathy2 posted a memo here about the new virtual currency question, but the thread morphed into a discussion about the new 1040 format. One poster asked, do only the taxpayers who have to complete Sche 1 answer this question? Evidently, it is "Yes" since only if Schedule 1 is completed does the software challenge it if it is blank. If Schedule 1 is not used, it doesn't come up. Does this make sense? Why doesn't it apply to everyone who files 1040?
-
-
It does apply to everyone, indirectly. Per instructions, "If, in 2019, you engaged in any transaction involving virtual currency, check the “Yes” box next to the question on virtual currency at the top of Schedule 1. [...] If, in 2019, you have not engaged in any transaction involving virtual currency, and you don't otherwise have to file Schedule 1, you don't have to do anything further. If you otherwise have to file Schedule 1, check the “No” box."Originally posted by Burke View Post
Maybe it's just a grammatical distinction, but everyone has to answer the question, but they only have to put their answer on tax return in two cases: if the answer is "yes", or if the answer is "no" but they have to file Schedule 1 for other reasons. This works the same as the question about foreign accounts on Schedule B, as far as I can tell.
My software (at first glance) provides an informational diagnostic if Schedule 1 is not present and the question is not answered, otherwise it provides a critical efile diagnostic if Schedule 1 is present and the question is not answered."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard -
Interesting. As I said my software poses no warning if this question is unanswered and Schedule 1 is not required to be filed. Per RR's comment, my software also does not alert an omission to the financial questions on Sche B if data does not exceed the $1,500 threshold.Comment
Comment