topic Re: Miscellaneous Income Question - Coinbase in Get your taxes done using TurboTax

Miscellaneous Income Question - Coinbase

taxiduff — Thu, 07 Apr 2022 14:54:47 GMT

We earned some miscellaneous income from Coinbase, but not anywhere near the threshold that would generate a 1099-MISC to myself or the IRS. I am trying to figure out where I should enter this on my return in Turbo Tax. Any ideas?

Re: Miscellaneous Income Question - Coinbase

AamilD — Thu, 07 Apr 2022 15:04:33 GMT

You can enter it as Miscellaneous Income even if you did not get a 1099-MISC. It will be reported as other income. Please follow the steps below to enter this in TurboTax:

Click on Tax Home from Left Side Menu.
Click on Wages & Income from the main screen.
Scroll down to the very end and there will be a section titled "Less Common Income". Within this section, there will be an option for "Miscellaneous Income". Click on Start next to it.
Then select "Other Reportable Income" and click Start next to it. Then click Yes on the next prompt. Then enter the description and amount.

Re: Miscellaneous Income Question - Coinbase

taxiduff — Thu, 07 Apr 2022 16:54:24 GMT

Thank you!

Re: Miscellaneous Income Question - Coinbase

taxiduff — Tue, 12 Apr 2022 17:40:36 GMT

A follow up question. This year they ask about getting or making any crypto transactions in 2021. Does getting free crypto from Coinbase mean we answer yes?

Re: Miscellaneous Income Question - Coinbase

AamilD — Tue, 12 Apr 2022 17:55:43 GMT

You will answer Yes. If you file a tax return, you must report all your income, no matter how little, and even if you don't get reporting forms.

However, did you sell the free cryptocurrency or are you holding it? If you didn't sell it, you don' have income yet but you will still answer the question as a Yes.

Cryptocurrency is treated like property. You only have taxable income if you sell it for more than you paid for it. (For example, if you buy a comic book for $1 and sell it for $100, you have $99 of income, but only when you sell. As long as you are just holding it, it doesn't create income.)

So if the exchange gives you rewards in the form of cryptocurrency, it only creates income when you sell. Since your cost is zero, all the proceeds are taxable income. But only when you convert it to real money.

Re: Miscellaneous Income Question - Coinbase

taxiduff — Tue, 12 Apr 2022 17:59:18 GMT

Got the free crypto, did not sell it. Reported $31 of miscellaneous income from Coinbase. But did not cash it out or anything. My coinbase statement just shows the $31 miscellaneous.

Thanks!

Re: Miscellaneous Income Question - Coinbase

DawnC — Tue, 12 Apr 2022 18:13:33 GMT

That is fine. When you sell, use or exchange that crypto in the future - you will report a capital gain or loss. Your basis in that crypto is now $31.