The cost basis on my mining rewards is incorrect and I cannot figure out how to fix it.
I mine HNT and then sell it, my cost basis should be practically zero other than some minor fees. However, my cost basis is higher than my proceeds for HNT on my Accointing generated 8949. How can I adjust Accointing to properly account for my mining cost basis?
Switched to Koinly, was able to figure out how to give my mining rewards a $0 cost basis in a couple minutes.
The cost basis of your HNT mining should be equal to the fair market price of the coin at the time you received it. We get our fair market value based off of the price reported by CMC at the time.
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Hey Matt, I am referring to the cost basis of the taxable event caused by mining the crypto currency. When I mine HNT, I need to pay taxes on the HNT I receive based on the fair market value of the HNT. There is no cost basis to deduct from that fair market value, just like if I received it as an airdrop.
The fair market value cost basis deduction comes in when I go to sell the HNT, since I already paid taxes on the tokens I received.
Accointing is calculating the second part correctly, when I go to sell the tokens. But the taxability of my initial receipt of mined HNT tokens, which should have zero cost basis reduced from it, is not being calculated correctly and I can’t manually adjust it.
Example: Last month my Helium miner was rewarded 10HNT. The receipt (or “mining”) of those 10HNT trigger a taxable event. I need to pay income taxes on the fair market value of those 10 HNT tokens. There is no cost basis to deduct from that fair market value.
Then I sell the 10HNT tokens for USDC. This is another taxable event. The taxes I need to pay, or losses I get to report, are based off of the cost basis of those 10 HNT tokens when I mined them (and already paid taxes on).
I claim the equipment, electricity, home office deduction etc as deductions separately on my taxes.
I noticed a problem too, I have not sold any HNT, so it does not appear anywhere in my tax report. I expected to see some income at the time the mining reward was received.
When printing a tax report, select ‘I file with a CPA’ from there open the .pdf file called Full_Tax_Report, here you can see your income, including mining.
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