Problem entering Celsius Network LLC 1099-MISC, registering as a business

Why did you get a 1099Misc?  It's not for self employment?

No idea why it's 1099-misc, but that's how they have always sent it. It wasn't a problem in TurboTax 2020. As far as I know all the crypto companies that offer interest send out 1099-misc.

Since it sounds like the income from your 1099-MISC was for interest earnings and not mining, you want to make sure it is entered correctly on your tax return. 

1. With your return open, go to Federal > Wages & Income
2. Open the Less Common Income section and start or revisit the last entry, Miscellaneous Income, 1099-A, 1099-C.
3. On the next screen, start/revisit the very last entry, Other Reportable Income, and answer Yes on the following screen.
4. On the next screen, enter a description (for example, "Crypto Interest") and then enter the total USD amount.
5. You may repeat this for every currency for which you received interest or combine them on a single line.
6. Select Continue when finished.

TY PatriciaV! Super helpful. So you are saying it's OK to sum up all my interest into a single line? IRS won't find that to be TOO confusing?

In general, as long as you report all your income, and have evidence for the numbers on your tax return, you are fine. The IRS computers check to be sure the totals they have from 1099's match the totals on your return.

Turbo Tax very clearly states on this page (Other Taxable Income, accessed following your directions):
"Do not enter income reported on Form 1099-MISC"

Who should i trust you or TT?

You can enter your 1099-MISC following these steps. Be sure to indicate that it is for interest income, not related to your job, and not an intent to make money.

To enter a 1099-MISC for miscellaneous income in TurboTax:

1. Open or continue your return
2. Search for 1099-misc and select the Jump-to link

1. Answer Yes to Did you get a 1099-MISC?
   • If you already entered a 1099-MISC, you'll be on the 1099-MISC Summary screen, in which case you'll select Add Another 1099-MISC
   • If you need to edit or delete a previously entered 1099-MISC, select the appropriate button
   •  
   • @mattmouth182

@ColeenD3 

But I definitely did intend to make money, that is why I invested crypto in this account.

This feels like I am being untruthful.

You intended to make investment income, not income from working or a business. If you say it was an intent to make money, TurboTax will send you to the business section to put this income on Schedule C. 

This question is not an IRS as much as it is a programming, where to take you next question and which form to report.

Normally investments would be reported on a 1099-Int or 1099 DIV or 1099B not a 1099 Misc. 

I see, so it's just poor wording on TT's part? So the "intent to make money" question is only there to determine if the income counts as a "job"? What is the IRS's definition of what type of income should be on a Schedule C?

Would it be better to just input it as a 1099-int even though it is a -misc? 

Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:

• Your primary purpose for engaging in the activity is for income or profit.
• You are involved in the activity with continuity and regularity.

This is a loose definition on what the IRS requirements are for filing a Schedule C as these definitions apply to earned income rather than passive income earned from investment income. 

No, do not input this as a 1099 INT because this will not match the 1099 MISC that the IRS has on record.

@mattmouth182

maybe this will help shed light on why it was sent out as a 1099-misc:

"According to the IRS, earning income on crypto is considered a taxable event in the US, and cryptocurrencies are generally treated as property (similar to gold or shares in publicly owned companies) for tax purposes. That means that interest paid to you on crypto assets are payments of property, making them subject to reporting through the 1099-Miscellaneous (also known as the 1099-MISC) form."

So it seems that the the reason it is a "misc" is that the payment is in a property, not a currency. Does this change your opinion?

If I bought an oil pumping well and let a company use it (on their land), and in return they paid me in oil, how would that be taxed?

Yes, the intent to make money refers to doing this as a job, not an investment.

Hmmm. Im using the online version. There is no Jump To Link. When I use the Search (magnifying glass) I just get a bunch of articles saying search, then jump to link. A frustrating loop. Keeps putting it into Self-Employment work....

The best way to clear the system of any confusion is to delete the entry and form and re-enter it.

 To delete, please follow the instructions below:

1. Within your return in TurboTax Online search for 1099-MISC.
2. Click the Jump to link in the search results.
3. Delete the 1099-MISC line with the trash can icon.
4. If you get to the question Did you have any self-employment income or expenses? answer No. 
5. Click on Tax Tools on the left side of the screen.
6. Click on Delete a Form. 
7. Scroll down to your 1099-MISC and click Delete if it is still there.

To enter the 1099-MISC as other income, not self-employment income, please follow these steps:

1. Open or continue your return
2. Select Search and search for 1099-misc
3. Select the Jump to link in the search results
4. Answer Yes to Did you get a 1099-MISC?
   • If you already entered a 1099-MISC, you'll be on the 1099-MISC Summary screen, in which case you'll select Add Another 1099-MISC
   • If you need to edit or delete a previously entered 1099-MISC, select the appropriate button
5. Enter the info from your form into the corresponding boxes
   • If you need to enter boxes 4–6 or 8–17, check My form has other info in boxes 1–17 to expand the form

@ericgfx

If you enter your interest income as "with intent to make money", then you could put in expenses, right? I intended/wanted to make money, but only earned interest income. But I did spend money learning how to do all of this, for example I bought a book.

Bumping this up to tax year 2022... same problem set - entered 1099-MISC for Celsius, and it was for their earn program (park crypto and get interest - before they went bellyUP, bankrupt)... AND as another OP stated last year - Turbo Tax added a Schedule C for this entry, which as was mentioned for tax year 2021 - is not helpful as it is asking about this as your business - and for SURE, Celsius wasn't my business... 

So, is the correct answer that works, and won't get me/possibly others into "trouble" with the IRS - is to NOT enter a 1099-MISC (when Turbo Tax asks for that info), but to add the info to Misc Income section (of Turbo Tax) - Wages and Income, Less Common Income, Misc Income (1099-A, 1099-C)?

Yes, that is one option.  After selecting Miscellaneous Income, you will see other options, select Other reportable income. On the screen where you enter a description and the amount, you may see information indicating that a 1099-Misc should not be reported in this section.  Ignore that statement and continue through the application.

The other option is to report your 1099-Misc in the section Other Common Income.  Other Common Income has an option specifically for Form 1099-Misc.  There are a few more screens to work through here versus the Less Common Income section; however, the screen(s) are more closely aligned with your Form 1099-Misc.  Please note that when working through the Other Common Income section, you will see a screen asking whether your 1099-Misc represents an intent to earn income/money, and while it may seem counterintuitive to select No, that is the response you need to select.  If you select Yes, TurboTax will report this income as self-employment income, and based on the comments in your post, your 1099-Misc does not represent income from self-employment.  

Either of these options will produce the result you want.  Although the latter option has a few more screens.  Your 1099-Misc income should appear on line 8 of Form 1040. 

@HillsideBruce 

I ended up doing the second option that @GeorgeM777  mentioned below... 

I first deleted the 1099-MISC form and associated Schedule C that had been automatically created.

Next, I added back in the 1099-MISC for Celsius, but this time I went into the form (1099-MISC wks for Celsius)

and under Box 3, I checked Other Income and that unchecked Schedule C (I think) in that same Box 3 options.

I forget if I had to also delete a Schedule C form for Celsius that Turbo Tax might have created.

But now when I run the check for mistakes - it comes up with no mistakes.  Yaaaayyyyyyy!!

Now all I need to do is work on some additional areas I flagged, AND work on massaging CSV files for input into ZenLedger for my taxable crypto transactions - something that should be simple, but last tax season I had big problems with this (CSV file massaging) and ended up getting assistance from ZenLedger support... This tax season, ZenLedger support is telling me that they can help, but it will cost me to get that CSV file help...

But the happiness is out there - not too far away from here, when I will hit that button to e-File my taxes, and hopefully they get accepted and hopefully I don't get audited and it will be clear sailing... 

PS Doing my taxes every year, even with the assistance of one mighty fine Turbo Tax product (that I have used the past umpteen yeaers) - is about the last thing I would want to be doing... No offense to anyone out there that does taxes professionally (my Dad used to do tax returns as a small business during tax season, with his brother, in New York City - MANY MANY years ago)...