It does not have to be reported as business income if you do not consider yourself as a business activity. If the crypto you earned from the 1099-MISC is from one of the activities mentioned below then it should be entered as 'Other Income' and not through the 1099-MISC entry.
- Form 1099-MISC is often used to report income you've earned from participating in crypto activities like staking, earning rewards or even as a promotional incentive from a broker or crypto exchange.
- 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.
Reporting Form 1099-B is different and is considered an exchange of an investment asset or property. It would not represent a double taxation of the same funds. Report it using your tax cost basis (which may be the taxable income from the rewards if this is the same crypto that you sold). Include both your purchase price and taxable rewards for any crypto you traded/sold.
- Use the Search (upper right) > type 1099b > Use the Jump to... link to begin > Scroll to the bottom of the page and select 'Add Investment'
- Continue to the screen that asks how you want to enter and select 'Enter a different way' (if you don't want to import)
- Select the appropriate box based on what sale you want to enter (1099-B, Other, etc)
- Follow the screens to complete your additional sales
@farleylai
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