Gemini does not provide tax advice. The information below is provided for general informational purposes and should not be considered tax advice. This article is based on IRS guidance received to date, which may continue to evolve and change. Please consult a tax advisor to determine your personal tax obligations that result from your activities on Gemini, including dispositions, earnings, and rewards.
2022 Tax Information Reporting issued by the Gemini Exchange
Gemini issues a Form 1099-MISC for any non-exempt U.S. exchange account holder who has earned more than $600 (USD equivalent) in income on the exchange during the calendar year. If applicable, income is reported in Box 3 (Other income) on the Form.
Accounts that have been issued a Form 1099-MISC will receive a notification via email to retrieve the Form. You can download your Form 1099-MISC (or confirm you did not receive one) in the Statements and History section on the Account page on the Gemini web or mobile app.
On the app: Go to Account (icon on top right of the mobile app) > Statements and History > Tax Documents > Form1099MISC/ 2022 > Download.pdf
On the website: Go to Account > Balances > Press the Download button (the shape that looks like a down arrow into a box) > Tax documents > Form1099MISC/2022 > Download
If you have not been issued a Form 1099-MISC for 2022, you will see a message that notifies you that the account does not have a tax form once the Download button is pressed.
Income activities on the exchange:
Earnings from lending crypto assets through the Gemini Earn program will be calculated by identifying the daily asset allocation multiplied by the current price of the asset at the time of allocation. Forms 1099-MISC will be issued according to this calculation (reflecting the USD equivalent) regardless of whether assets have been redeemed from Earn.
As paying agent, Gemini has a legal obligation (pursuant to US tax law and regulations) to report income earned by customers via the Earn program on Forms 1099-MISC. This includes all Earn income which was credited to a customer’s account and available for withdrawal at any point during tax year 2022 (regardless of whether or not it was actually withdrawn by the customer). Any Earn income amounts accrued subsequent to the suspension of withdrawals will not be reported on Forms 1099-MISC for tax year 2022 given such amounts were not accessible by customers for withdrawal at any point after the suspension.
To determine your Earn income for the year:
1 - You can go to Account> Balances> press the Download button > select Transaction History> Grow Transaction History> set the appropriate date range (1/1/2022 through 11/15/2022)> download the report. If you have an unfulfilled redemption request at an earlier date, you can calculate earnings on that asset up to the date the redemption request was submitted.
2 - If you have participated in both Staking and Earn programs and would like to show Earn only, you will need to filter column E of this report (“Borrower”) to reflect “Genesis” and filter out “Staking” transactions.
3 - Filter the report by Column C (Type): Interest Credit. There will be a column for each crypto asset lent that reflects the income in U.S. dollars titled “Amount USD”. The sum of the daily “Amount USD” credits for the calendar year, for each asset lent, will be the amount presented on the Form 1099-MISC (if it exceeds the $600 threshold). Please make sure to include the “Amount USD” for each asset lent to identify your total Earn income amount. Please note that if the Earn income amount does not meet the $600 threshold, but your Gemini account reflects staking, bonuses, or rewards that when added to the Earn income amount do meet the threshold, a Form 1099-MISC will be issued.
Refer a Friend, Sign Up, or Trading Bonuses
Bonuses/promotions will also count toward the $600 threshold of income earned on the Gemini platform that will require Gemini to issue the Form 1099-MISC.
To determine your bonus income for the year:
1 - You can go to Account> Balances> press the Download button > select Transaction History> Exchange Transaction History> press the Download button> set the appropriate date range (1/1/2022 through 12/31/2022)> download the report.
2 - Filter the report to find your bonuses. Your bonuses will show up under Type: Credit, Symbol: either BTC or ETH (depending on the promotion you participated in), Specification: Administrative Credit or Referral Credit. Refer to the “BTC Amount BTC” or “ETH Amount ETH” columns for credits reportable as income.
New Money Monday Winnings
If you are a New Money Monday winner, your Form 1099-MISC will include the value of your prize. If your prize was a crypto asset (“$500 in ETH”) you will find the crypto asset as a deposit in your transaction statement. If you won an NFT, the value of your prize was calculated as the current value of the NFT at the date it was delivered to your Nifty Gateway account.
Reportable earnings from Staking crypto assets through the Gemini Staking program will be calculated by identifying the daily asset allocation multiplied by the price of the asset at the time the asset becomes available to the staking participant. For MATIC, which can be unbonded/reclaimed from the Staking program at any time (with a short unbonding period), Form 1099-MISC reporting for the year will match the daily accruals listed on the account statement.
Since ETH earned through Staking is currently not accessible by the Staking participant, and cannot be unbonded until the Shanghai upgrade, 2022 Form 1099-MISC reporting will not include accrued ETH Staking rewards that appear in account statements. Those assets will be reported to the participant as income once the asset becomes available to redeem from the Staking program (expected to be reported on 2023 Forms 1099-MISC). At that time, the amount of income reported will be calculated as the amount of asset earned to date at the value of the asset on the day it becomes available. Forms 1099-MISC will be issued according to this calculation (reflecting the USD equivalent) regardless of whether assets have been redeemed from Staking.
To determine your Staking income for the year:
1 - You can go to Account> Balances> press the Download button > select Transaction History> Grow Transaction History> set the appropriate date range (1/1/2022 through 12/31/2022)> download the report.
2 - Filter the report Column C (Type) to show only “Interest Credit.” Filter Column E (Borrower) to show only “Staking.” If you participated in MATIC Staking in 2022, there will be a column reflecting your MATIC accruals that provides the income amount in U.S. dollars titled “Amount USD”. The sum of the daily “Amount USD” credits for MATIC staking for the calendar year will be the amount reportable on the Form 1099-MISC if it exceeds the $600 threshold. Please note that if the MATIC Staking income amount does not meet the $600 threshold, but your Gemini account reflects Earn income, bonuses, or rewards that when added to the Staking income amount do meet the threshold, a Form 1099-MISC will be issued.
Credit Card Rewards
In general, the US Internal Revenue Service (“IRS”) deems credit card rewards as “rebates” rather than “income”. Therefore, Gemini does not report assets that are acquired through the credit card rewards program as income on Forms 1099-MISC. There are some scenarios (such as selling crypto assets acquired via the credit card rewards program for a profit) that may need to be considered for tax implications. Please consult with a tax professional for any questions related to your individual tax situation.
From 2017 through 2020 Gemini reported proceeds from dispositions of crypto assets on Forms 1099-K. This was industry standard at the time. Upon further evaluation of the requirements of Internal Revenue Code Section 6050W, Gemini does not currently issue Forms 1099-K for dispositions. Based on recently passed legislation, Gemini plans to issue Forms 1099 for crypto asset dispositions as required once the pending crypto tax reporting regulations are finalized and in effect.
Forms 1099 for dispositions of crypto assets (1099-B or 1099-DA)
The Infrastructure Investment and Jobs Act of 2021 indicates a 1099 reporting obligation for dispositions of crypto assets under section 6045 of the US Internal Revenue Code (currently applicable to reporting dispositions of traditional securities on Form 1099-B).
However, the IRS has delayed the requirement for issuing Forms 1099 for dispositions of crypto assets in Announcement 2023-02. As such, Gemini will not be issuing Forms 1099-B (or 1099-DA) for 2022. Please see the IRS website for more information on this matter, including the full text of the Announcement.
To prepare your U.S. tax filing obligations, you may be required to reference your transaction data. You can access your transaction history Excel file by following the steps below:
1 - To download transaction statements on the website, you can go to Account> Balances> press the Download button > select Transaction History> Exchange Transaction History> set the appropriate date range> download the report. This statement will give you purchase, sell, deposit, and withdrawal history as well as bonus/prize/referral income.
2 - For other income earned on the exchange (via Earn and Staking), you can download the Grow statement using the following path: Account> Balances> press the Download button > select Transaction History> Grow Transaction History> set the appropriate date range (1/1/2022 through 12/31/2022)> download the report.
Determining crypto tax liabilities for 2022:
The IRS has issued guidance on the taxation of crypto activities including earnings, gains, losses, and donations. How these transactions are taxed may vary depending on each individual’s personal tax situation, which is why it is critical for each filer to consider their own situation independently. Please consult with a tax professional for any questions related to your individual tax situation.
How will my crypto transactions be taxed?
Earned crypto: Crypto assets can be earned on the Gemini exchange by lending assets through Earn, participating in Staking, or through bonuses, contests, or promotions. Please consult with a tax professional for any questions related to your individual tax situation.
Dispositions: Gains and losses from cryptocurrency dispositions may be taxed differently for different types of investors. Refer to IRS Publication 544 for further guidance. A disposition occurs when crypto assets are sold for fiat currency, exchanged for other assets (including other crypto assets), or used to purchase goods or services.
How to Report Crypto Transactions on a U.S. Tax Return
The Form 1040 (U.S. individual income tax return) asks whether at any time during the year the taxpayer received, sold, sent, exchanged or otherwise acquired any financial interest in any virtual currency. This question was specifically designed to identify taxpayers who have engaged in crypto transactions in the absence of a clear information reporting regime that applies to crypto exchanges. Please note that if your only activity was the purchase of crypto assets with fiat currency and you had no earnings or dispositions, you are not required to answer yes to this question.
In general, U.S. individual taxpayers will file the Form 1040, reporting the income from crypto asset transactions on Schedule 1, and capital gains and losses from crypto transactions on an attached Schedule D. Transactions are itemized on Form 8949 where a taxpayer will list each disposition along with a corresponding tax basis to determine a gain or loss.
Due to the increasingly complex rules for taxation of crypto transactions, Gemini is offering a free TaxBit account for each exchange account holder. TaxBit will allow you to link your Gemini account (and any other TaxBit Network exchange account) to a central location, determine a tax lot selection method, and produce a Form 8949 that will assist in determining your total gain or loss from crypto transactions to report on a Form 1040.
A TaxBit account should not be used as a substitute for the advice of a professional advisor. Please consult a tax advisor to determine your personal tax obligations that result from your activities on Gemini, including dispositions, earnings, and rewards.