How to Report Celsius Crypto Earnings on Your Taxes

Celsius Network has become an incredibly popular platform for earning interest on your crypto holdings. With over 300,000 active “Celsians” at the time of this writing, the platform is seeing explosive growth and shows no sign of slowing down.

This has many investors eventually asking the question: How do I report my Celsius crypto earnings on my taxes?

In this guide, we break down the tax implications of Celsius. Whether you are earning interest or borrowing crypto via loans, we take a look at the tax implications associated with these transactions.  

Additionally, we look at how you can automate all of your Celsius and crypto tax reporting with CryptoTrader.Tax.

How Do Crypto Taxes Work?

Cryptocurrency in-and-of-itself is not taxable. Rather, the income generated from cryptocurrency investing activity is taxable income and needs to be reported each year.

The IRS treats cryptocurrencies as property for tax purposes. This means that when you sell, trade, or otherwise dispose of your crypto, you incur capital gains and losses that needs to be reported on your taxes.

Additionally, when you earn cryptocurrencies, whether from interest accounts on Celsius, from mining, staking, or income from a job, that income is subject to income taxes at the fair market value of the cryptocurrencies at the time you earned them.

For a deep dive on everything you need to know about cryptocurrency and taxes, checkout our Ultimate Cryptocurrency Tax Guide.

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Celsius Interest Accounts

Cryptocurrency that is earned as interest from your Celsius account is a form of taxable income.

The amount of income that you recognize is equal to the fair market value in USD of the interest at the time it was received. 

Example

Lucas earned 0.03 BTC in interest rewards from his crypto holdings during the month of March. When Lucas received this interest from Celsius, 0.03 BTC was worth $300.

In this example, Lucas recognizes $300 of interest income that he must report on his taxes. 

You can learn exactly which tax forms you need for tax reporting in our guide here: How to report your cryptocurrency on your taxes.

Celsius Loans

The Celsius platform allows you to borrow against your cryptocurrency. From a tax perspective, taking out a loan from crypto-based collateral does not trigger a taxable event. In other words, you do not realize any gains or losses in your crypto-based collateral when you borrow against it. 

However, depending on what you do with the cryptocurrency you receive from your loan, for example if you use it to buy and sell more cryptocurrencies, these transactions would be subject to associated capital gains and losses.

Celsius Supported crypto Tax Software

CryptoTrader.Tax - Automate Your Celsius Tax Reporting

CryptoTrader.Tax is cryptocurrency tax software that is built to automate all of your Celsius and crypto tax reporting. 

You can simply import your Celsius Transaction History directly into your CryptoTrader.Tax account. With the click of a button, the software will generate your necessary crypto tax reports based on your historical data.

These tax reports can be sent to your accountant or even imported right into TurboTax or TaxAct.

You can create an account, import your data, and preview your gains/losses and income in your home fiat currency completely for free. Claim your free account here.

Questions? 

We help over 50,000 crypto investors easily file their taxes. Feel free to reach out to our live-chat customer support team via our homepage with any questions you have. Or follow us on Twitter! We’re happy to help.