Please see this from a TurboTax Help article.
How do I report a crypto airdrop?
Cryptocurrency airdrops are (usually) free distributions of coins or tokens into multiple wallet addresses to promote and drive the adoption of a new virtual currency.
Recently, the IRS ruled that airdrops, along with promos and staking rewards, only become taxable once the taxpayer "acquires the ability to transfer, sell, exchange, or otherwise dispose of the cryptocurrency." Airdropped currency that's not yet usable or accessible would therefore not be taxable until the taxpayer can exercise control over it.
Step 1 - Convert to USD
Step 2 - Enter in TurboTax
Once you have the USD values, here's how to enter them into TurboTax:
- With your return open, go to Federal then Wages & Income
- Open the Less Common Income section and select Start or Revisit next to Miscellaneous Income, 1099-A, 1099-C
- On the next screen, select Start or Revisit the very last entry, Other Reportable Income
- Answer Yes on the Any Other Taxable Income? screen
- On the next screen, enter a description (for example, "crypto airdrop") and then enter the total USD amount
- Select Continue when finished.
Crypto staking
