What is the cost basis of mined Monero?
The cost basis of mined Monero is the starting value you use to work out a gain or loss when you later sell, spend, or trade your XMR. In many tax systems, including the United States, it is generally the coin’s fair market value in your local currency when you receive it as taxable mining income—not the electricity or equipment cost of mining it.
How you work out the starting value
Fair market value means the amount your XMR would reasonably sell for at that time. You usually calculate the basis of a mining payment like this:
XMR received × price per XMR when recognized as income = cost basis
For example, suppose you receive 0.02 XMR when one XMR is worth $150. Those are made-up figures, not a current price quote.
- Your mining payment is worth $3.
- Under a system that taxes mining rewards when received, you generally report $3 of mining income.
- That payment then has a $3 cost basis.
Each later payment can have a different basis because the price changes. Keep each payment as a separate record, often called a tax lot.
When does a mining payment count as received?
This is especially important if you mine through a browser or a mining pool—a service that combines miners’ work and shares the rewards.
A balance shown on a mining website is not automatically the same as XMR you control in your wallet. Depending on your country’s rules, the relevant time may depend on when the reward is credited, becomes withdrawable, or comes under your control.
Consider these differences:
- Pending earnings: An estimate may not yet be an amount you have a right to receive.
- Pool balances: A minimum payout threshold or withdrawal restriction can affect the analysis.
- Wallet payments: Record when the payment arrives and when it becomes available.
Monero’s newly mined coins are locked for 60 blocks. A pool payout may instead be an ordinary transfer. Neither a blockchain timestamp nor a website’s payout label necessarily settles the tax timing question. Ask a local tax professional if your service’s arrangement is unclear.
What happens when you sell or spend it?
Your cost basis helps prevent the same value from being taxed twice under an income-then-capital-gains system.
Using the earlier example, suppose you later sell that 0.02 XMR for $4, with no fees:
- You already recognized $3 as mining income.
- Your sale proceeds are $4.
- Your gain is $1, not $4.
If you sell it for $2 instead, you have a $1 loss. Whether and how you can deduct that loss depends on local rules. Spending XMR or exchanging it for another coin can also trigger a taxable disposal.
Which costs and records matter?
Electricity, computers, and mining-service charges are not automatically added to your coins’ basis. They may qualify for separate deductions, depending on your jurisdiction and whether your mining counts as a business. Transaction fees also need appropriate treatment.
Keep records of:
- Each payment’s date, time, and XMR amount.
- Its local-currency value and the price source used.
- Pool statements, wallet transactions, and fees.
- Which payments you later sell or spend.
Moving XMR between wallets you own generally does not reset its basis.
The bottom line
Your mined XMR’s basis is often its value when recognized as mining income, not your mining expenses. Confirm your country’s timing and valuation rules, and save payment records before you need to calculate a sale.
