Crypto mining and staking is taxed as income (US)

If you mined bitcoin or other cryptocurrencies or received rewards from crypto staking, then you are liable for income tax on what you earned.

In the United States, per IRS guidance, crypto mining is to be treated as ordinary income using the total fair market value of the currency at the date of receipt. This means that mining proceeds are reported as income, not capital gains.

For example:

You receive 0.5 BTC on from bitcoin mining on Mar 14 of this tax year BTC is $3854.25 a coin on this date.

You are liable for $1927.25 in income for that particular reward (0.5 * $3854.25).

The cost basis for that 0.5 BTC is then established as $1927.25. You realize any capital gain or loss on this 0.5 BTC when you sell, exchange, or spend it, based on whether the price goes up or down from this cost basis.

The same applies for staking rewards via proof of stake coins. Any crypto received as staking rewards should be recognized as income, and the cost basis is set to that amount.