This article is part of TokenTax's Cryptocurrency Tax Guide.
For guidance on how to import staking transactions with our template or manual entry, read here: How to Import Staking with Our Template Format.
Crypto mining and staking tax is income tax
If you mined bitcoin or other cryptocurrencies or received rewards from crypto staking, then you are likely liable for income tax.
In the United States, per IRS guidance, crypto mining is to be treated as ordinary income using the total fair market value of the currency at the date of receipt. This means that mining proceeds are reported as income, not capital gains.
For example, if you received 0.5 BTC on March 14, 2019 from bitcoin mining, when BTC was $3854.25 a coin, you are liable for $1927.25 in income for that particular reward. The cost basis for that 0.5 BTC is then established as $1927.25.
The same applies for staking rewards via proof of stake coins. Any crypto received as staking rewards should be recognized as income, and the cost basis is set to that amount.
How to calculate crypto mining and staking taxes
You must know the fair market value at the time of receipt for every time you received mining or staking rewards. You then report your overall income of the tax year on your tax return.
If you haven’t been noting down the time and value of each reward, that’s okay. Many people are using crypto tax software to automatically import their mining data and to calculate the fair market values.
How to report mining and staking income taxes with TokenTax
There’s two ways you can go about automatically calculating your crypto mining / staking taxes with TokenTax.
We support 19 top crypto wallets for automatic import. If you are mining directly into one of these wallets, you can add it via the import page.
If the vast majority of transactions in the wallet are mining, you can set the default incoming transaction type as “income” and then, once the import is complete, you can set anything that isn’t income back to a deposit.
You can also upload any CSV export from a wallet or staking service and our team will input it into your account so that the income is properly recognized.
Once all of your mining and/or staking data is in, your total income amount will show on your dashboard. Be sure to include this income on your tax return.