How are crypto staking rewards captured in TurboTax when staked outside of an exchange and therefore not captured on a Form 1099?

[JamesG1 · Accepted solution]

The IRS has ruled that staking rewards only become taxable once the taxpayer "acquires the ability to transfer, sell, exchange, or otherwise dispose of the cryptocurrency." 

You will need to convert your staking rewards to US dollars if they haven't been issued as U.S. dollars. Here is how to enter your staking rewards in TurboTax as other income:

• 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. 

The entries will be reported:

• on line 8z of Schedule 1 of the Federal 1040 tax return, and 
• on line 8 of the Federal 1040 tax return.