Cryptocurrency that you have not “bought” is still treated as taxable income, this includes the following activities:
Crypto payments - if you’re being paid in crypto by your employer you will be taxed according to your income tax bracket.
Mining - Miners should establish if their activity classes them as a hobbyist or business miner - click here for guidance. Hobbyists should declare cryptocurrency received as additional income on Form 1040 Schedule 1. Business miners should report on Schedule C Profit or Loss from Business, their income is subject to 15.3% self-employment employment tax.
Rewards - this could be from staking, masternodes, interest on crypto deposits, etc. These types of activities should be analyzed and reported for tax in the same way as mining.
Hard forks - New coins received after a hard fork are taxable and should be treated as ordinary income equal to the fair market value of the new crypto when received. See more detailed information about hard forks.
Airdrops - The taxable income from an airdrop would be the fair market value in USD of the airdropped coins at the time they are received.
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Disclaimer: This article is intended as an informative piece. This is not accounting or tax advice. Please speak to a qualified tax professional about your specific circumstances before acting upon any of the information in this article.