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However, it posed the question on a schedule 1 form, which not all taxpayers use. When received, crypto gambling winnings are taxed as ordinary income at a federal and state level. Your crypto tax rates depend on your gross income, but range from 0-37%. If you have gambling winnings from a us-based operation, typically a flat 24% will be withheld by the payer. $600 or more in gambling winnings (except winnings from bingo, keno, slot machines, and poker tournaments) and the payout is at least 300 times the amount of the wager; or any other gambling winnings subject to federal income tax withholding. Generally, report all gambling winnings on the “other income” line of schedule 1 (form 1040). You started by buying $1k of bitcoin, this is your cost basis. You won another $1k of bitcoin via gambling, this $1k is taxed as income. From a tax perspective it's the same as if you won $1k in us dollars (taxed as income) and immediately used them to buy bitcoin. Your total cost basis in bitcoin is now $2k. Any sports betting earnings that go beyond $600 are expected by the irs to be reported by the gambler when they file their taxes. Any unpaid taxes will accrue interest; if a bettor cannot pay the taxes owed on time, the irs will garnish the bettor’s wages. Amber_sam • 28 min. I believe the winning should be. But if you held bitcoin for a longer time, capital gain might have occurred too. There's still a threshold for cgt so if your winning/gain is in the low thousands of pounds, it should be tax free. Perhaps people in r/bitcoinuk will be more helpful Gambling winnings are fully taxable and you must report the income on your tax return. Gambling income includes but isn't limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips. You started by buying $1k of bitcoin, this is your cost basis. 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