Does Coinbase and other exchange integration include earn?

[Ajcicc]

I've linked my Gemini and Coinbase account to TurboTax, it imported just fine and showed as a 1099-B but i am wondering where the earn income goes? I don't see it show up anywhere but I was told by a TurboTax rep that the earn income would come through VIA the integration.

[HelenC12]

When you say "earned" income, do you mean the gain on the sale of your crypto or that you consider this self-employed earned income?

The type of income depends on whether the cryptocurrency was considered earned income or treated as a property sale. You'll need to go through every sale to determine the type of income. 

Cryptocurrency received as payment for goods and services is taxed as earned income and is reported on Schedule C, Profit or Loss From Business. You'll need to manually enter the information on the Schedule C. See the information below:

• If you earned money by providing a service or selling something, you’d have to report it as earned income (either wages or self-employment income) as if you’d been paid in cash. 
• See How do I report income from self-employment?

Cryptocurrency sold, exchanged, spent or converted, is treated as sale of property. TurboTax will generate a Schedule D and if needed, Form 8949:

• Like property sales or the sale of stock, any gain or loss from the sale or trade of cryptocurrency is reported as a capital gain or loss. See How do I report Bitcoin or other cryptocurrency as a capital gain?
• If you buy and sell it within 12 months, it’s treated as a short-term capital gain.
• If you hold it for over 12 months, it’s taxed at the lower, long-term, capital gain rates.

Cryptocurrency received as income, and then held and sold for profit, is taxed as both:

If you were paid in cryptocurrency, you'd first pay taxes on the earned income. Then, if you later sold it for a profit, you'd pay the capital gains tax (short or long-term, depending on how long you held it). You'd also need to keep track of the value it had when you got it, and when you sold/used it.

As an example: If you were paid in cryptocurrency on Monday, and then used it to pay for something else on Friday, you'd have to know what it was worth during both days in order to calculate if you needed to report a gain or a loss. In this case, it would be like paying for something with stock instead of cash.

[Ajcicc]

Thanks for the response.

It would be the self-employed earned income (comes from the earn feature in the exchange where you get interest on money you have staked).

So from your response, I'm assuming this income is not imported from Coinbase or other exchanges, and I would need to enter that data myself?

[JohnB5677 · Accepted solution]

Yes, income from staking will not be included with the sale or exchange of currency.  It will have to be entered separately.

Staking will generate passive income. This is like getting interest in a checking account.

With your return open, go to

1.  Federal
2. Wages & Income
3. Less Common Income
4. next to Miscellaneous Income, 1099-A, 1099-C
5. Select Other Reportable Income
6. Answer Yes on Any Other Taxable Income? Screen
7. Continue through the interview

[Ajcicc]

Thanks John,  I will enter it manually. I just didn't want to duplicate data that may have been brought in through the coinbase integration that you offer.