Cryptocurrency, while not brand new, is certainly one of the fastest-rising income-earning endeavors that is quickly becoming more mainstream. As your question suggests, there are certain logistical questions surrounding cryptocurrency that can make tax reporting challenging. Needless to say, the IRS will still insist on tax law conformity. I'm providing you with three FAQ links which should be able to assist you with Bitcoin mining reporting.
The first FAQ covers general rules. As a miner, you could have two separate tax transactions: the amount you earn when you mine the cryptocurrency, followed by the capital gains you earn when you cash in your cryptocurrency and convert it to traditional money. The production of the currency is self-employment: you pay self-employment tax on your net gain of mining, in addition to Federal (and state and local) income tax at your marginal tax rate based on the dollar equivalent value of the currency on the day you produced it. That same value becomes your basis in the currency, and when you cash it in, you then subtract your basis from your sale price to determine your capital gain (or loss). This FAQ provides more detail: https://ttlc.intuit.com/replies/6468300
The second FAQ deals specifically with mining taxation, as well as how to report your activities when you do not receive a 1099-MISC: https://ttlc.intuit.com/replies/6467560
Finally, this last FAQ gives information as a "Help Center" for a number of other situations surrounding Cryptocurrency taxation issues: https://ttlc.intuit.com/replies/6468764
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
