Rewards earned through validation activities in a proof-of-stake network will need to be included as part of a taxpayer’s gross income, the IRS said.
The IRS said rewards earned through validation activities in a proof-of-stake network will need to be included as part of a taxpayer’s gross income.Connect/Create WalletNo wallet? No problem. You can set one up for free. We recommend Torus for first-time users.U.S. cryptocurrency investors who earn rewards from staking services will need to include the value of those rewards as part of their gross income, the Internal Revenue Service said Monday.
The fair market value is determined as of the date and time the investor gains dominion and control over the rewards, according to the IRS.The IRS update comes as authorities have homed in on certain staking services provided by crypto exchanges in the U.S.brought by the Securities and Exchange Commission for failing to register the offer and sale of its staking program, and agreed to pay a $30 million fine.
A federal court also ruled in July that Kraken must provide the IRS with account and transaction information. Staking is also at the heart of the SEC’s lawsuit against Coinbase, the largest crypto exchange in the U.S. The SECthe company’s staking products amount to an investment contract under American law and the exchange failed to register its staking-as-a-service program.
© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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