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Level 2
posted Jan 2, 2022 2:41:45 PM

1099-MISC

Hello.  I received a 1099-MISC from BlockFI, which reports "other income" that i earned by staking my crypto on their lending platform.  I viewed this income as ordinary interest and was expecting a 1099-INT.  As a result, Turbo Tax is classifying this income as "sole proprietor" income in the income summary tab.  Of course, I'm only a retail investor here so I'm not certain what the ramifications are wrt to reporting this income as business income on Schedule C.  I don't want to fill out a form C or be considered a sole proprietor on my tax return.  How can i solve this matter or concern please?

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2 Replies
Level 15
Jan 2, 2022 3:55:45 PM

Here's how to enter a 1099-MISC with income in box 3 in TurboTax so that it is reported as "other income" instead of as business income. It will be reported on Schedule 1 line 8z with the description "Other Income from box 3 of 1099-Misc."

 

  • In the Search box type "1099-misc" (without the quotes), then click the link that says "Jump to 1099-misc."
  • The first screen asks "Did you get a 1099-MISC?" Click Yes.
  • On the next screen enter the information from the 1099-MISC form, then click Continue.

 

TurboTax will now ask a series of questions about the 1099-MISC income. Answer as follows, even if some of the answers aren't true.

 

  • "Describe the reason for this 1099-MISC." - It doesn't matter what you enter. Enter a short description such as "Crypto." Click Continue. You will see this description used in some of the subsequent questions, but it will not appear on your tax return.
  • "Does one of these uncommon situations apply?" - Select the last choice, "None of these apply," and click Continue.
  • "Did the Crypto involve work that's like your main job?" - Select No and click Continue.
  • "How often did you get income for Crypto?" - "I got it in 2021" will already be checked. Don't check any of the other boxes. Just click Continue.
  • "Did the Crypto involve an intent to earn money?" - Select No and click Continue.

 

Level 2
Jan 4, 2022 10:12:04 AM

Many thanks for the quick reply.  That fixed this issue.  thank you much!