! States during the year may be subject to tax under

CAUTION section 877A. These resident aliens compute their

tax using the method prescribed under section 877A when completing Form 1040-C. See Form 8854 and its instructions. Also, see chapter 4 of Pub. 519 for more information.

• Received digital assets as a result of a reward or award;

• Received new digital assets as a result of mining, staking, and similar activities;

The following actions or transactions in 2026, alone, generally don’t require you to check “Yes.”

• Received digital assets as a result of a hard fork;

• Disposed of digital assets in exchange for property or services;

• Disposed of a digital asset in exchange or trade for another digital asset;

• Sold a digital asset; or

• Otherwise disposed of any other financial interest in a digital asset.

You have a financial interest in a digital asset if you are the owner of record of a digital asset; have an ownership stake in an account that holds one or more digital assets, including the rights and obligations to acquire a financial interest; or own a wallet that holds digital assets.

• Holding a digital asset in a wallet or account.

6 Instructions for Form 1040-C (Rev. 1-2026)

• Transferring a digital asset from one wallet or account you own or control to another wallet or account that you own or control.

• Purchasing digital assets using U.S. or other real currency, including through the use of electronic platforms such as PayPal and Venmo.

Do not leave the question unanswered. You must answer “Yes” or “No” by checking the appropriate box. For more information, go to IRS.gov/VirtualCurrencyFAQs .

How to report digital assets transactions. If you disposed of any digital asset in 2026, that you held as a capital asset, through a sale, exchange, or transfer, check “Yes” and use Form 8949, Sales and Other Dispositions of Capital Assets , to calculate your capital gain or loss and report that gain or loss on Schedule D (Form 1040).

If you received any digital asset as compensation for services or disposed of any digital asset that you held for sale to customers in a trade or business, you must report the income as you would report other income of the same type (for example, W-2 wages on Form 1040-C, Schedule A, line 1).

If you disposed of any digital asset by gift, you may be required to file Form 709. See Who Must File and Transfers Subject to the Gift Tax in the Instructions for Form 709 for more information.