topic Re: The purchase of cryptocurrency is pretty straightforward to document, but I received cryptocu... in Get your taxes done using TurboTax

The purchase of cryptocurrency is pretty straightforward to document, but I received cryptocurrency as staking rewards and for watching videos. how do I report those?

manixa — Fri, 31 Jan 2020 16:08:20 GMT

Coinbase offers promotions to give attention to newer cryptocurrencies. if you watch videos about that currency, you are rewarded with some of that cryptocurrency. also, I received staking rewards for owning a particular currency. im not sure how to document these.

Re: The purchase of cryptocurrency is pretty straightforward to document, but I received cryptocu...

GiseleD — Fri, 31 Jan 2020 21:48:40 GMT

These promotions and staking rewards are similar to airdrops, so you will recognize ordinary income once these promos/staking rewards are available for you to trade/withdraw/spend. This is pursuant to IRS Revenue Ruling 2019-24.

There are two ways to handle this.

Option 1: DIY. If your promos/rewards are not converted to USD for you by the issuer, you will need to do a little math. You will take the USD value of the particular cryptocurrency on the day it is available for you to trade/withdraw/spend and multiply it by the amount of cryptocurrency received. To find the value of the cryptocurrency in question, you can visit a site like Coin Market Cap. Use the close price or the average price. It doesn't matter which you use; please just use the method consistently in all your calculations.

For example:

You receive .00008881 BTC as a promo on 10/10/2019. On that day, you determine that the close price of BTC was $15,000 USD.

Multiply .00008881 BTC * $15,000.

The result is $1.33213. Round to $1.33 USD.

Do this for all cryptos you received in via airdrops, promos, and staking rewards.

*IMPORTANT: Please keep records of your math. You don't need to submit your calculations with your return, but you DO need to keep them in the event your return is ever examined by a taxing authority.

Option 2: Reach out to an independent tax pro who specializes in crypto reconciliation. There are many online, and they can do the math for you and provide you with the final numbers. You will then be able to input the final numbers in your return. Again, keep records.

Regardless of which option you choose, here's how to enter your final numbers in TurboTax Online:

1) Log in and go to Income & Expenses (tab at top).

2) In Your Income and expenses, scroll to Less Common Income.

3) Click Show more, scroll down, and click Start next to Miscellaneous Income.

4) On the next page, scroll down and click Start next to Other reportable income.

5) On the Any Other Taxable Income page, click Yes.

6) Make your entries on the Other Taxable Income page. You will aggregate all your airdrops/promo/staking income and put them in the first box.

Re: The purchase of cryptocurrency is pretty straightforward to document, but I received cryptocu...

marcosadeghi — Mon, 03 Jan 2022 05:29:12 GMT

Say I have 100 staked tokens that I have purchased at $1 but they are vaulted for a year (I can see the number increase but not trade or sell). Does this mean when the tokens are available to me & the value is $2, I need to recognize an ordinary income of $100 (100*2 - 100*1) or long term capital gains of 100? Please clarify. Thanks

Re: The purchase of cryptocurrency is pretty straightforward to document, but I received cryptocu...

fanfare — Mon, 03 Jan 2022 12:28:14 GMT

[removed by me]

Re: The purchase of cryptocurrency is pretty straightforward to document, but I received cryptocu...

fanfare — Mon, 03 Jan 2022 12:29:41 GMT

answer withdrawn