Taxes for someone who holds miner stock or bitcoin, in plain terms

Miner stock and bitcoin are taxed under the same headline rule and differ in the details.

When you sell either one for more than you paid, the difference is a capital gain. When you sell for less, it is a capital loss. Shares of a miner are stock. Bitcoin, in the IRS's words, is property, not currency. Both are capital assets in most people's hands, so the same gain-and-loss arithmetic applies to both. The differences come in three places: the wash-sale rule, the form your broker sends, and the events that count as a sale.

The number everything starts from is your basis. The IRS defines it plainly: "Generally, an asset's basis is its cost to the owner." Gain or loss is what you sold for minus basis. Keep your own record of every purchase, because the broker's copy can be incomplete, and for bitcoin it often is.

Holding more than one year changes the rate.

The IRS draws one line: "if you hold the asset for more than one year before you dispose of it, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term." Short-term gains are "subject to taxation as ordinary income at graduated tax rates", meaning they are added to your wages and taxed in your bracket. Long-term gains have their own rates: 0, 15 or 20 percent, set by taxable income.

Here is the line in practice. The dates are chosen so one sale is a year or less and the other is more than a year.

One day moved the tax by $72 on an $800 gain. The same rule applies to bitcoin sold for dollars. Both go on Form 8949 and are summarized on Schedule D, which is where the IRS says to "report most sales and other capital transactions".

Losses offset gains, and then $3,000 of other income a year.

Losses are netted against gains first. If losses win, the IRS caps what the rest can do: "the amount of the excess loss that you can claim to lower your income is the lesser of $3,000 ($1,500 if married filing separately)" or the net loss. What is left carries forward to later years.

The wash-sale rule is written for stock, and the IRS pages do not extend it to bitcoin.

Publication 550 states the rule. A wash sale "occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: buy substantially identical stock or securities", and then "you cannot deduct losses from sales or trades of stock or securities in a wash sale". The loss is not gone. It is added to the basis of the replacement shares, and the old holding period carries over. The rule touches losses only; a gain is taxed whether or not you buy back.

The end is the same $300; the timing is not. The rule stops you taking the $500 loss this year while keeping the position. The 30 days run both ways, so buying on 2026-01-20 and selling at a loss on 2026-02-02 is caught too.

Bitcoin is where the two assets part. The rule names "stock or securities". The IRS classifies digital assets as property, and its digital-assets pages do not apply the wash-sale rule to them. Whether that stays so is a question for Congress, and how it applies to your trades is a question for a professional; this article only reports what the pages say today.

For bitcoin, more things count as a sale.

Selling stock for cash is the taxable event. For a digital asset the IRS lists more: you must answer yes on Form 1040 if you "disposed, sold, exchanged or transferred ownership of digital assets: for another digital asset; for U.S. dollars or other currency; in exchange or trade for property, goods or services." Swapping bitcoin for another coin, or paying for something with it, is a disposal with a gain or loss on that day. Receiving it as payment, a reward or from "mining, staking and similar activities" is income when received, and that value becomes the basis of the coins.

The Form 1040 question is asked of everyone: "At any time during the tax year, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?" Holding miner stock does not by itself make the answer yes; holding bitcoin and doing nothing with it does not either.

A 1099 is your broker's report of the same sales, sent to you and to the IRS.

For stock, the form is 1099-B: "a broker or barter exchange must file this form for each person" who sold securities for cash. It lists each sale's proceeds, and it is the document the IRS matches your Schedule D against. Check it line by line against your own records; if the broker did not know your basis, the form cannot show the right gain.

For bitcoin held at a broker, the form is 1099-DA, used "to report digital asset proceeds from broker transactions". It is new. The IRS states that brokers "must report gross proceeds for transactions effected on or after Jan. 1, 2025" and "must report basis on certain transactions effected on or after Jan. 1, 2026". A 1099-DA for 2025, then, may show what you sold for and nothing about what you paid; the gain is still yours to work out and report.

One more line for larger gains. A 3.8 percent net investment income tax applies to "the lesser of: the net investment income, or the excess of modified adjusted gross income (MAGI) over" a threshold: $200,000 single or head of household, $250,000 married filing jointly, $125,000 married filing separately. Gains from stock count as investment income. It is computed on Form 8960.

A miner's own tax line shows up in its filings for a different reason.

Companies pay tax on profit, and their filings carry a line called income tax expense or benefit. Two things make a miner's line unusual. A company that lost money in earlier years has net operating losses, which by definition are past losses it may use to reduce taxable profit in later years. And accounting requires the company to record today the tax it expects to pay or save later, as a deferred tax liability or a deferred tax asset. A deferred tax asset is the future saving those losses represent; a valuation allowance is the part of it the company does not expect to be able to use. When the outlook changes, the allowance changes, and the tax line can swing with no cash moving at all.

Neither number is a bill paid to the Treasury. Each is the accounting figure the company arrived at, and the income tax note in the same 10-K explains its parts: current tax, deferred tax, the change in any valuation allowance and the losses carried forward. For a reader of a miner's results, the practical rule is to read the note before reading the headline profit, because a benefit of $56 million can be a change of estimate rather than a change in the business.

What to take away, and what to ask a professional.

1. Write down the date and price of every purchase of stock and bitcoin. Basis is the number every other number depends on.
2. Check the date before selling at a gain: more than one year is long-term.
3. If you sell stock at a loss, do not buy it back within 30 days on either side, unless you mean to defer the loss.
4. For bitcoin, treat every swap and every payment as a sale, and expect the 1099-DA to be missing your basis for 2025.
5. Take the year's forms, this article and your records to a licensed professional. The rules above are federal only, they change, and your situation decides which apply.

The other two articles, on dilution and how miners raise money, explain what the companies do with the shares you hold.