Income Tax Now Applicable to Staking Rewards Once Tokens Are Received, IRS States
The IRS has issued a new ruling, stating that staking rewards received by US crypto traders must be treated as taxable income in the year they are acquired.
Staking involves investors locking up their cryptocurrency assets to validate transactions and earn rewards. The IRS explains that if a taxpayer stakes cryptocurrency on a proof-of-stake blockchain. And receives additional units of cryptocurrency as rewards upon validation. The fair market value of these rewards will be included in their gross income for the taxable year when the taxpayer gains control over the rewards. This ruling applies even if the staking is done through a cryptocurrency exchange.
Jesse Powell, co-founder of Kraken exchange. Expresses disappointment in the ruling, arguing that it fails to account for inflation and the consequences of not staking. Which can affect the overall value and ownership of coins.
Clever Robot News Desk 3rd August 2023
