how to enter crypto interest earnings?

Forum|Forum|3 years ago
February 25, 2023
1 reply
9 views

so a crypto exchange paid me interest for staking stablecoins and they issued me a 1099 misc. i entered the 1099 into turbotax and when i finished it gave me a warning that i didn't generate a schedule or something. this forced me to declare it as self employment income and went into a rant of explaining when did i fund my business, how many employees do i have, how do i pay them and so on.

this can't be right. i am not self employed. i'm not an independent contractor. i don't have a business. think of it as putting money in a saving accounts and they paid me interest. that's it. how can i figure out how to enter this properly? i don't want to pay turbotax live for something that i believe it's on their end

anyone has some tips?

TurboTax Premier Online

fjleontaxAuthor

Level 2

according to this post https://ttlc.intuit.com/community/taxes/discussion/crypto-yearly-interest-income-reporting/00/849965 i should select that the staking did NOT involve an intent to earn money? i'm no "tax expert" as the one that made that comment, but that seems flat out false. the only reason i staked the crypto was because i knew i was going to earn interest on it.

please advise

JamesG1

Level 15

The IRS has ruled that staking rewards become taxable once the taxpayer "acquires the ability to transfer, sell, exchange, or otherwise dispose of the cryptocurrency."

You will need to convert your staking rewards to US dollars if they have not been issued as U.S. dollars.

You may report your staking rewards in TurboTax as other income:

Down the left side of the screen, click Federal.
Down the left side of the screen, click Wages & Income.
Click Show more to the right of Less Common Income.
To the right of Miscellaneous Income, 1099-A, 1099-C, click the Start / Revisit button.
To the right of Other reportable income, click the Start / Revisit button.
At the screen Other Taxable Income, enter a description such as “Cryptocurrency rewards” and an amount.

The entries will be reported:

on line 8z of Schedule 1 of the Federal 1040 tax return, and
on line 8 of the Federal 1040 tax return.

@fjleontax

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fjleontaxAuthor

Level 2

I need to ensure I'm filing the 1099 misc as that's what the IRS has. Will doing this on top of already have entered the 1099 (and answered no on all questions) get me double taxed? Or should I delete everything and start again? I just want to be sure the 1099 misc stays declared

I received two 1099 misc from 2 crypto providers and i transferred the entire account from provider 1 to provider 2. I haven't converted/sold anything just yet, but i still must declare the "interest"