Skip to main content
Products
Exchanges Crypto Prices
Tax Guide IRS Letter Guide
Blog Support
/equity.svg

Crypto portfolio assistant

Track and manage your crypto investment performance.
View pricing
/calculator.svg

For Accountants

Enable your clients to stay compliant with virtual currency tax regulations.
View pricing
/tax-requirement.svg

Crypto taxes

Accurately calculate your taxes and generate your tax reports.
View pricing
/briefcase-lock.svg

Enterprise

Differentiate your business with the gold standard in crypto tax compliance.
Learn more

Try out the mobile app

Google Play Store Apple App Store

How do I report mined cryptocurrency?

Disclaimer: CoinTracker is provided for informational purposes only. This service is not intended to substitute for tax, audit, accounting, investment, financial, nor legal advice. For financial, tax, or legal advice please consult your own professional. The information on CoinTracker is subject to change without notice. All information is provided "as is." CoinTracker disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Please see our full disclaimer.

It depends on whether you are a hobby miner or a self-employed (business) miner. Here are some of the measures that the IRS provides for determining which camp you are in:

  • The manner in which the taxpayer carries on the activity

  • The expertise of the taxpayer or his advisors

  • The time and effort expended by the taxpayer in carrying on the activity

  • Expectation that assets used in activity may appreciate in value

  • The success of the taxpayer in carrying on other similar or dissimilar activities

  • The taxpayer’s history of income or losses with respect to the activity

  • The amount of occasional profits, if any, which are earned

As you can see, there is some amount of subjectivity to the classification. As an example, if you have a full-time custom mining rig, you are probably a business, and if you are randomly doing some mining on an old computer, you are probably a hobbyist. In both cases you will need to report your mined coins as taxable ordinary income and your basis will be the fair market value at the time you receive the coins.

Hobbyists

  • Income will go on line 21 (other income) of your Form 1040 Schedule 1 (Additional Income and Adjustments to Income)

  • Expenses directly associated with mining will go on a Schedule A form (Itemized Deductions); miscellaneous subject to 2% of AGI limitation (does not apply in 2018 onward)

  • Your income is not subject to the 15.3% self-employment tax (only normal income tax), however you receive fewer and less valuable deductions against your income

Business Miners

  • Income and expenses both go on a Schedule C form (Profit or Loss from Business)

  • Your income is subject to the 15.3% self-employment tax, though there are more valuable deductions against your income

Note: the rules are different in Canada and the United Kingdom

  • Updated