Reviewed and updated October 16, 2026
What to know
Cryptocurrency mining can create taxable income before any coins are sold for cash. The reporting depends on the activity and the facts. Check the enacted rules for the tax year; a proposal does not establish a tax obligation.
Rules and decisions to review
- The fair market value of mined digital assets when received generally is includible in gross income.
- If mining rises to a trade or business, income and allowable expenses must be evaluated under business tax rules, including possible self-employment tax.
- The value included as income generally becomes basis for a later sale or exchange. Later appreciation or decline is a separate reporting event.
- Keep records of wallet receipts, valuation method, equipment, electricity and transactions. Personal use and business use should be identified rather than treating every household cost as deductible.
A practical example
If a miner receives coins worth $500 and later sells them for $650, receipt and sale are separate tax events. Accurate basis records help avoid treating the entire later sale proceeds as an additional gain.
Records to gather
Gather wallet exports, mining pool reports, receipt timestamps, dollar valuations, asset purchase invoices and business expense records.
Your next step
Export mining and wallet activity before records become difficult to retrieve. Separate income at receipt from later dispositions, reconcile basis and ask whether the activity is a business under the actual facts.
Official sources
This guide provides general information. The rules depend on the tax year, jurisdiction and your circumstances. Ask our team which filing or planning steps apply to you.
