Should crypto income with form 1099-MISC go into Schedule B or not? Turbo tax doesn't know how to handle this income

[RandomDude34345]

Is there a way to force Turbotax to report this income with 1099-MISC in Line 8z "Other income. List type and amount" on Schedule 1 instead of 8h "Prizes and awards"? That would be the most clean way to do it. 

[DianeW777 · Accepted solution]

Yes.  You can report this as other income entering the Form 1099-MISC.  This will record the income on Line 8z, Schedule 1. There is also an alternative method if you want to delete your Form 1099-MISC.

You should select it was not your main job and there was no intent to earn money. This income will show up on Schedule 1, Line 8z.

You can view your 1040 form before you e-file:

1. Open or continue your return. (TurboTax Online)
2. With the Tax Tools menu open, you can then:
   • View only your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu.
3. TurboTax CD/Desktop - Select Forms (upper right) > Scroll to Schedule 1 (left) > View line 8z

Please follow the instructions below to report Other Income (Without 1099-MISC):

1. Click Federal Taxes -> Wages & Income and scroll down to Less Common Income
2. Go to the last selection, Miscellaneous Income and click Start
3. Go to the last option, Other reportable income and click Start
4. When it asks, "Any other reportable income?" > yes and then type in a description and the amount to report it on your tax return.
5. TurboTax Online and TurboTax CD/Download will use the same procedure
   1. How do I view and delete forms in TurboTax Online?
   2. How do I edit or delete a 1099-MISC?

@RandomDude34345

[RandomDude34345]

Thank you. It also worked automatically if "On the How often did you get income for XXX? screen, select I got it in 2021.  Note: If you have done this work in the past and plan on doing this in the future, this may be self-employment income. ?" . Appreciate your feedback. Hopefully these instructions will help people in the future. If you are not earning 10% on our USD yet, what are you waiting for? 

[Pebbles2]

As has been replied in other posts, advice saying to indicate that there was no intent to earn money is not at all accurate.  Of course it was to earn money.  It's basically interest on a currency on deposit.  TT needs a category for this other than prizes and awards but that seems to be what everyone is having to use.

[JamesG1]

There are three screens in the standard entry of an IRS Form 1099-MISC.  The screens are:

• Did the xxx involve work that’s like your main job?
• How often did you get the income?
• Did the xxx involve an intent to earn money?

These questions try to discern whether or not the income being reported on the 1099-MISC qualifies as self-employment income.

The questions refer to the tests that the IRS would use were your or my tax return scrutinized by the IRS to determine whether the 1099-MISC income would be subject to both income tax and self-employment tax.

You may enter your staking rewards in TurboTax Online as follows:

• With your return open, select Federal from the left side navigation.
• On the top tabs, select Wages & Income
• Scroll down to Less Common Income section and select Start or Revisit next to Miscellaneous Income, 1099-A, 1099-C
• On the next screen, select Start or Revisit next to Other Reportable Income
• Answer Yes on the Any Other Taxable Income? screen
• On the next screen, enter a description and enter the total US dollar amount
• Continue with the onscreen interview until complete. 

The income is reported on Schedule 1 line 8z and Federal 1040 line 8.  View the entries at Tax Tools / Print Center / Print, save or preview this year's return / Include government and TurboTax worksheets.

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." 

03/31/2022 7:48 AM PST]

@Pebbles2

[kbgods]

I get the "Other Income".  Does the IRS treat this "Other Income" as  a Summary.  I have 100's of tiny transactions adding up to approx $200 that are made up from staking, loaning, air drops, learning/earning from multiple sites on multiple chains.  Just dippping my toe in the water and learning.  I can import the sales from Quicken so that can be loaded electronically.   I have all the other data in Quicken, but no way to get it out and entered electronically, at least that I can find.

thnx