In $2023,$ using a cryptocurrency platform, Karl sold Bitcoin that he held as a capital asset, as an individual. How will this sale be reported on Karl's tax return?

He will check the "Yes" box next to the question on digital assets on page $1$ of Form $1040$ and:

He will use Form $8949$ to figure his capital gain or loss and report it on Schedule D $($Form $1040).$

He will use Schedule C $($Form $1040)$ to report the sale.

He will use Schedule E $($Form $1040)$ to report the sale.

The gain or loss from the sale of virtual currency is not taxable and does not need to be reported anywhere else on his return.