Earning from crypto games has tax implications. Here’s what you need to know (but always consult a tax professional for your specific situation).
Disclaimer First
This is general information, not tax advice. Tax laws vary by country and change frequently. Consult a qualified tax professional for your situation.
General Principles
Crypto Earnings Are Taxable
In most jurisdictions, earning cryptocurrency—including from games—is taxable income.
Two Tax Events
- Earning: When you receive tokens (income)
- Selling: When you convert to fiat (capital gains/losses)
Common Taxable Events in P2E
- Collecting rent/rewards (income)
- Mining and receiving tokens (income)
- Selling NFTs for earnings (capital gains)
- Swapping tokens (potentially taxable)
- Receiving airdrops (income)
Record Keeping
Track everything:
- Date of each transaction
- Amount of tokens received
- Fair market value at time of receipt
- Cost basis of assets sold
- Transaction fees paid
Tools That Help
- Crypto tax software (Koinly, CoinTracker, etc.)
- Spreadsheet tracking
- Blockchain explorers for transaction history
- Exchange export reports
Common Mistakes
- Not reporting because “it’s just a game”
- Ignoring small transactions
- Poor record keeping
- Not understanding cost basis
- Missing deadlines
Strategies to Consider
- Hold longer for long-term capital gains rates
- Harvest losses to offset gains
- Time income recognition strategically
- Keep detailed records from day one
When to Get Help
Consult a crypto-savvy tax professional if:
- Earnings are significant
- You’re unsure about anything
- Your country has complex rules
- You’re trading actively
Comments are closed