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How do I report crypto staking rewards
AI accountant’s answer:
When it comes to reporting crypto staking rewards on your tax return, you'll need to report them as income. Here's a general outline of how to do it: 1. Determine the fair market value (FMV) in USD of the staking rewards at the time you received them. Many crypto platforms or exchange services can provide this information. 2. Keep a record of the cryptocurrency you received as a staking reward, the date it was received, and its FMV in USD. 3. Report the FMV of the staking rewards as ordinary income on your tax return. Usually, you'll include this amount on Schedule 1 (Form 1040), Line 8z "Other income" or in some cases, Schedule C (Form 1040) if you're engaged in a trade or business related to cryptocurrencies. 4. If you eventually sell or exchange the cryptocurrency that you received as a staking reward, you'll need to report a capital gain or loss on your tax return. Your basis in the staked cryptocurrency will be its FMV at the time you received it. Keep in mind that this is a general overview, and your specific situation may vary. It's important to maintain accurate records and consult a tax professional if you have any questions regarding your unique tax situation.
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Michael Eaton, CPA
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