The IRS taxes your net capital gain, which is simply your total capital gains (investments sold for a profit) minus your total capital losses (investments sold at a loss). One feature on Nicehash that stands out is the mining profitability calculator. The gain, whether its a short-term or long-term capital gain, will depend on how long youve held the cryptocurrency. over each full tax year since Bitcoin started. Its bad enough when your mutual funds assets lose value, but owing unexpected capital gains taxes after those losses is doubly frustrating. Get started, Find deductions as a 1099 contractor, freelancer, creator, or if you have a side gig Despite the decentralized, virtual nature of cryptocurrency, and because the IRS treats it like property, your gains and losses in crypto transactions will typically affect your taxes. The Ultimate NiceHash Tax Reporting Guide | Koinly Every 4 hours. The price of BTC when Tina Orem is an editor at NerdWallet. Take note that the process of mining is often seen as income tax in several countries, whilst trading incurs capital gains tax. Only with such independence can a client be confident that their interests are prioritized over their advisers profits. Alternatively, treat them as deposits and withdrawals for the same tax effect (excluding deducting the trading fee). First, you receive $200 worth of the cryptocurrency Litecoin in exchange for services on January 15. See the Tax Professionals and Accountants page for more information and to try it out. Promotion: NerdWallet users get 25% off federal and state filing costs. Divly will import the transactions. 1099-B, Proceeds from Broker and Barter Exchange Transactions. Mutual fund performance metrics are based on how much value the mutual funds assets gain. Long-term capital gains on so-called collectible assets can be taxed at a maximum of 28%. If using Nicehash CSV files, the two sides of each trade are exported in different files. Any tax-related information provided by us is not tax advice, financial advice, accounting advice, or legal advice and cannot be used by you or any other party for the purpose of avoiding tax penalties. In Investing, How Do You Combat Uncertainty of Force Majeure? and suggests how to handle those situations. Privacy Policy. Nicehash legacy files are also supported in Divly (files downloaded from the old platform before the Nicehash hack).