You can report mined cryptocurrency and directly purchased cryptocurrency as a sale of asset. The value of the cryptocurrency at the time it was mined or bought becomes your cost basis in the capital asset. When a you sell crypto then the amount received will be reported as proceeds and will be offset against the cost basis in the asset. If the value of the crypto is higher at the time of the sale, then you have a capital gain. If the value is lower then you will have a capital loss. Every sale or trade of mined crypto must be reported on an IRS 8949 cryptocurrency tax form.
Once you have your numbers you can enter them in TurboTax:
- Open or continue your return.
- Select Federal from the left menu, and Wages & Income from the menu near the top.
- Scroll down and select Show more next to Investment Income.
- Select Start or Revisit next to Cryptocurrency.
- Follow the instructions and we'll calculate the gain or loss from the sale.
