Updated for 2025 Tax Year

The Ultimate Guide to DePIN Crypto Taxes (2025)

Everything you need to know about reporting income, claiming deductions, and staying compliant with IRS rules for Helium, Hivemapper, Render, DIMO, Filecoin, and other DePIN networks.

$1.16M

Section 179 Limit (2024)

15.3%

Self-Employment Tax

5-7 Yrs

MACRS Depreciation

IRS Forms Required

Start Tracking Taxes Free Try DePIN ROI Calculator

What You Will Learn

What is DePIN and how is it taxed?
Two-step tax process for mining rewards
Section 179 and hardware depreciation

Required IRS forms explained
Network-specific tax guides (Helium, Hivemapper, etc.)
Tax-saving strategies for miners

What is DePIN and How is it Taxed?

DePIN (Decentralized Physical Infrastructure Networks) are blockchain projects that incentivize participants to deploy physical hardware (hotspots, dashcams, GPUs, storage) in exchange for cryptocurrency rewards.

The IRS treats DePIN mining rewards as taxable income at the fair market value (FMV) when received. Unlike traditional crypto mining, DePIN often involves significant hardware investments that can be depreciated for tax purposes.

Important: DePIN is NOT like Rental Property

Many miners mistakenly use Schedule E (rental income). DePIN rewards are active income, not passive rental income. Use Schedule 1 or Schedule C instead.

The Two-Step DePIN Tax Process

When You Receive Rewards

Mining rewards are ordinary income taxed at your marginal tax rate (10-37%).

Record FMV at time of receipt
Report on Schedule 1 or Schedule C
May owe self-employment tax (15.3%)

When You Sell Tokens

Sales trigger capital gains/losses based on price change since receipt.

Cost basis = FMV when received
Report on Form 8949 + Schedule D
Long-term rates (0-20%) if held 1+ year

DePIN Networks Comparison

Click each network for a detailed tax guide specific to that project.

Helium

Decentralized wireless network for IoT and 5G coverage

$HNT$IOT$MOBILE

Hardware: Hotspots, antennas, outdoor enclosures

View Tax Guide →

Hivemapper

Decentralized mapping network using dashcam data

$HONEY

Hardware: Hivemapper dashcam, mounting equipment

View Tax Guide →

Render Network

Decentralized GPU rendering for 3D and AI workloads

$RNDR

Hardware: High-performance GPUs, workstations

View Tax Guide →

DIMO

Vehicle data monetization platform

$DIMO

Hardware: DIMO device, compatible vehicle

View Tax Guide →

Filecoin

Decentralized storage network

$FIL

Hardware: Storage servers, high-capacity drives

View Tax Guide →

IRS Forms for DePIN Miners

Form	Purpose	When to Use
Schedule 1 (Form 1040)	Report mining rewards as "Other Income" (Line 8z)	Hobby mining or small-scale operations
Schedule C	Report self-employment income from mining business	Regular mining activity with profit intent
Form 8949	Report capital gains/losses from token sales	Every time you sell, trade, or spend crypto
Schedule D	Summary of capital gains/losses from Form 8949	Accompanies Form 8949
Form 4562	Depreciation and Section 179 deduction for equipment	Claiming hardware depreciation

Hardware Depreciation & Section 179

One of the biggest tax advantages for DePIN miners is the ability to deduct hardware costs. You have two main options:

Section 179 Deduction

Deduct the full cost of equipment in the year of purchase.

• 2024 Limit: $1,160,000
• Must be used 50% or more for business
• Great for high-income miners

MACRS Depreciation

Spread deductions over 5-7 years for computer equipment.

• 5-year: Computers, hotspots, GPUs
• 7-year: Office equipment
• Better if income varies by year

Tax-Saving Strategies for DePIN Miners

1. Track Every Expense

Electricity, internet, repairs, even mileage to check equipment — all deductible for business miners.

2. Use HIFO for Sales

Highest-In-First-Out cost basis method minimizes capital gains by selling highest-cost tokens first.

3. Pay Quarterly Estimates

Avoid underpayment penalties by paying estimated taxes every quarter (April 15, June 15, Sept 15, Jan 15).

4. Consider an LLC or S-Corp

At higher income levels, an S-Corp election can reduce self-employment tax significantly.

Automate Your DePIN Taxes with DePIN Tax

Stop spending hours on spreadsheets. DePIN Tax automatically tracks your rewards, calculates cost basis, and generates IRS-compliant reports for all major DePIN networks.

Connect Solana wallets in one click
Auto-classify HNT, IOT, MOBILE, HONEY, RNDR
FIFO/LIFO/HIFO cost basis methods

Export Form 8949 and Schedule D
Hardware depreciation calculator
AI-powered deduction finder

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Frequently Asked Questions

How are DePIN mining rewards taxed?

DePIN mining rewards are taxed as ordinary income at the fair market value when received. This creates a taxable event - you owe income tax on the USD value at the time of receipt. When you later sell the tokens, you may owe capital gains tax on any price increase.

Can I deduct my Helium hotspot as a business expense?

Yes! Under Section 179, you can deduct the full cost of DePIN hardware (up to $1.16 million in 2024) in the year of purchase if used for business. Alternatively, you can depreciate equipment over 5-7 years using MACRS.

What is the difference between hobby mining and business mining?

The IRS considers it a business if you have profit motive, regular activity, and run it professionally. Hobby mining goes on Schedule 1 (no deductions). Business mining goes on Schedule C (deductions allowed but subject to self-employment tax of 15.3%).

How do I calculate cost basis for DePIN tokens?

Your cost basis is the fair market value (FMV) at the time you received the tokens as mining rewards. Use methods like FIFO (First-In-First-Out), LIFO (Last-In-First-Out), or HIFO (Highest-In-First-Out) to determine which tokens you are selling.

Do I need to report crypto mining if I did not sell any tokens?

Yes. Mining rewards are taxable income when received, regardless of whether you sell. You must report the fair market value as income even if you HODL. The sale triggers a separate capital gains event.

What expenses can DePIN miners deduct?

Common deductible expenses include: equipment costs (Section 179 or depreciation), electricity, internet (business portion), repairs and maintenance, home office (if applicable), professional fees (CPA, tax software), and hosting/colocation fees.

Network-Specific Tax Guides

Dive deeper into the tax implications for each DePIN network:

Helium (HNT/IOT/MOBILE)Hotspot deployment & IoT rewards Hivemapper (HONEY)Dashcam mining & mileage deductions Render Network (RNDR)GPU rendering & CapEx depreciation DIMOVehicle data monetization Filecoin (FIL)Storage mining & hardware costs How to Report Mining IncomeStep-by-step IRS reporting guide