The Treasury Department tax division has released a draft for 1040 form instructions that replaces the section for “virtual currency” to the broader term “digital assets.”

Whereas before, tax filers had to report any “unit of account, store of value, or medium of exchange,” now they have to report “any digital representations of value that are recorded on a cryptographically secured distributed ledger or any similar technology, according to form instructions," according to these languages.

This means NFTs will now be considered into annual income reports.

However, before its final release, the instructions could still be subject to change.

Author: Katie Lin