Are bug bounty rewards taxable income?

Yes, bug bounty rewards are generally taxable income. Tax authorities in most countries, including the US IRS, classify cryptocurrency received as compensation as ordinary income. The taxable amount equals the fair market value of the crypto on the date you received it. For example, if you receive 0.5 BTC worth $20,000 when claiming a bounty, that's $20,000 in taxable income. You must report this on your tax return. Additionally, if you later sell that Bitcoin for more or less than $20,000, you'll owe capital gains tax on any profit or can claim a loss. Keep detailed records of when you received the reward and its value at that time. Tax treatment varies slightly by jurisdiction, so consult a tax professional for your specific situation.