How is crypto mining taxed?

Crypto mining tax usually applies at two points. First, the coins you mine are treated as income when you receive them. Second, when you later sell, swap or spend those coins, you may have a capital gain or loss. As of October 2026, that is the basic approach in the US, with similar ideas in the UK, Canada and Australia.

How are bitcoin mining taxes calculated in the USA?

The IRS set out its view in Notice 2014-21. When you successfully mine virtual currency, the fair market value of the coins on the day you receive them is included in your gross income. The IRS FAQs on virtual currency add that the value is measured in US dollars, and that the same value becomes your basis in the coins.

If your mining is a trade or business and you are not doing it as an employee, the notice says the net earnings count as self-employment income and are subject to self-employment tax. The IRS digital assets page lists mining among activities that require a "Yes" answer to the digital asset question on Form 1040. It points to Schedule 1 for reporting mining income and Schedule C for business profit or loss.

When you later sell mined coins you hold as a capital asset, you have a capital gain or loss. Your holding period starts the day after you receive the coins. Holding for more than a year makes it long-term, and one year or less makes it short-term. For the wider rules, see how crypto is taxed in the US.

What crypto mining tax deductions are there?

Deductions depend on whether you mine as a business. A business reports profit or loss, which means income minus allowable business costs, on Schedule C in the US. In Canada, the CRA says ASIC miners and GPU rigs can qualify for capital cost allowance in class 50, judged item by item. In the UK, HMRC says appropriate expenses reduce the amount taxed when mining is not a trade. For how mining works, see what is crypto mining.

How is crypto mining taxed in the UK, Canada and Australia?

UK. HMRC says mining may be a trade, depending on how much activity, organisation, risk and commerciality is involved. If it is not a trade, the pound value of tokens when received is taxed as miscellaneous income. Selling those tokens later can trigger Capital Gains Tax.

Canada. The CRA says that for residents, mining will in most cases count as carrying on a business because of its scale and resources. Mining rewards are business income in the year earned.

Australia. The ATO says that if you carry on a mining business, the crypto you receive is trading stock, and you must value that stock at the start and end of each income year. Not every miner runs a business, and the ATO says that depends on your circumstances.

For other countries, see crypto tax around the world.

Rules differ by country and change often. Check the tax authority or a qualified professional for your own situation.