To be clear. Staking awards are taxable. Staking will generate passive income. This is like getting interest in a
checking account, and this is how to account for it:
- With your return open, go to
- Federal
- Wages & Income
- Less Common Income
- next to Miscellaneous Income, 1099-A, 1099-C
- Select Other Reportable Income
- Answer Yes on Any Other Taxable Income? Screen
- Continue through the interview
The value at which you received it will become your basis for future transactions
@narayananvm
As stated here you should have included it on your 2020 tax return. The correct way to do this would be to file an amended 2020 tax return with that income included. But that would generate a very small amount of tax (under $45). So the IRS won't get too upset about that.
You should report it this year, but you should use a basis of "0" because you didn't report it last year.
Yes, the second transaction at $3 would be long-term.
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