Request

Scope

Elon Musk

<div class="insidebitcoins"> 
 <div class="telegrame_cta_content"> 
  <div class="wrap"> 
   <div class="telegrame_cta_content_inr"> 
    <p>Join Our <u>Telegram </u>channel to stay up to date on breaking news coverage</p> 
   </div> 
  </div> 
 </div> 
 <p><span style="font-weight: 400">The Internal Revenue Service (IRS), the top US tax authority, has issued fresh guidelines that say earnings from crypto staking rewards are taxable when received.&nbsp;&nbsp;</span></p> 
 <p><span style="font-weight: 400">The move from the IRS offers much-needed clarity on crypto taxation rules. U</span><span style="font-weight: 400">nder the </span><span style="font-weight: 400">new IRS ruling</span><span style="font-weight: 400">, crypto investors are required to report staking rewards as gross income in the year they receive them. </span></p> 
 <p><span style="font-weight: 400">This marks a significant departure from previous years, where taxation could be deferred. This means, in practical terms, that if a crypto investor ‘stakes’ a cryptocurrency and, in turn, receives additional tokens as rewards, these new tokens must be declared as income in that same tax year.</span></p> 
 <h2 id="b-scope-of-the-new-irs-ruling-b"><b>Scope of the new IRS Ruling</b></h2> 
 <p><span style="font-weight: 400">The new IRS ruling applies to fiat-method taxpayers who earn cryptocurrency as remuneration for validating transactions on proof-of-stake blockchains. More importantly, it does not distinguish between staking activities performed directly by the investor or through centralized crypto exchanges. Hence, whether an investor stakes their crypto assets on their own or via a platform like Coinbase, the income earned from staking must be declared for taxation purposes in the same tax year.&nbsp;</span></p> 
 <p><span style="font-weight: 400">The ruling further mentioned, “The fair market value is determined as of the date and time the taxpayer gains dominion and control over the validation rewards. The same is true if a taxpayer stakes cryptocurrency native to a proof-of-stake blockchain through a cryptocurrency exchange and the taxpayer receives additional units of cryptocurrency as rewards as a result of the validation.”</span></p> 
 <h2 id="b-reactions-to-the-irs-ruling-b"><b>Reactions to the IRS Ruling</b></h2> 
 <p><span style="font-weight: 400">In an </span><span style="font-weight: 400">exclusive interview</span><span style="font-weight: 400">, the Head of tax at crypto tax firm Koinly, Danny Talwar, explained that crypto rewards that are accrued and locked would not be taxable unless the reward owners gain ‘dominion and control’ over the rewards i.e the ability to sell, exchange, or dispose of them.&nbsp;</span></p> 
 <p><span style="font-weight: 400">Jason Schwartz, tax partner and digital assets co-head at Fried Frank, termed the ruling disappointing while </span><span style="font-weight: 400">arguing</span><span style="font-weight: 400"> that blockchain networks that pay staking rewards aren’t employers or similar counterparts who can accrue taxable income to the reward recipients.&nbsp;</span></p> 
 <blockquote class="twitter-tweet" data-width="550" data-dnt="true"> 
  <p lang="en" dir="ltr">IRS: "STAKING REWARDS ARE INCOME"</p> 
  <p>Today the IRS issued Revenue Ruling 2023-14 confirming its view that consensus-layer staking rewards are taxed at FMV when the staker has dominion and control over them (i.e., the ability to sell them). A brief🧵…</p> 
  <p>— CryptoTaxGuy.ETH ⌐◨-◨ 🦇🔊🛡️ (@CryptoTaxGuyETH) July 31, 2023</p> 
 </blockquote> 
 <p></p> 
 <p><span style="font-weight: 400">On the other hand, Ryan Selkis, founder of Messari, drew an analogy between the new IRS filing and paying stock dividends. He </span><span style="font-weight: 400">said</span><span style="font-weight: 400">, “The IRS says PoS rewards should be included in gross income, which means crypto has taken the concept of a “stock dividend” and made it taxable.”</span></p> 
 <blockquote class="twitter-tweet" data-width="550" data-dnt="true"> 
  <p lang="en" dir="ltr">What PoS blockchains do at scale is embed state-level taxes into their protocols.</p> 
  <p>The IRS says PoS rewards should be included in gross income, which means crypto has taken the concept of a "stock dividend" and made it taxable.</p> 
  <p>You get a taxed for slicing a pizza in 10 vs. 8. pic.twitter.com/3qlm6lAGQv</p> 
  <p>— Ryan Selkis 🪳 (@twobitidiot) July 31, 2023</p> 
 </blockquote> 
 <p></p> 
 <h3 id="strong-related-strong"><strong>Related</strong></h3> 
 <ul> 
  <li>SEC’s Chilling Request Signalled End of US Crypto Industry, Coinbase CEO Says</li> 
  <li>Stablecoin Bill Advances in US House Despite Opposition From Democrats</li> 
 </ul> 
 <div class="inContentProviderSingle inContentColor--insidebitcoins fc-row"> 
  <div class="inContentProviderSingle--wrapper"> 
   <div class="container"> 
    <div class="row mb-lg-3"> 
     <div class="col-12 col-md-8"> 
      <p class="inContentProviderSingle--title">Wall Street Memes - Next Big Crypto</p> 
     </div> 
     <div class="col-12 col-md-4"> 
      <div class="inContentProviderSingle--rating"> 
       <div class="rating--holder"> 
        <p class="rating--text">Rating</p> 
        <div class="rating--star-container"> 
         <div class="rating--star" style="width: 100%;"></div> 
        </div> 
       </div> 
      </div> 
     </div> 
    </div> 
    <div class="row">  
     <div class="col-12 col-md-12 text-center d-block d-sm-block d-md-none d-lg-none"> 
      <img class="inContentProviderSingle--img mb-3" src="data:image/svg+xml,%3Csvg%20xmlns='//www.w3.org/2000/svg'%20viewBox='0%200%20125%2060'%3E%3C/svg%3E" alt="Wall Street Memes" width="125" height="60" data-lazy-src="https://thebittimes.com/image/getimage/?url=https://thebittimes.com/image/getimage/?url=https://insidebitcoins.com/wp-content/uploads/2023/05/wall-street-memes.svg"> 
      <noscript> 
       <img class="inContentProviderSingle--img mb-3" src="https://thebittimes.com/image/getimage/?url=https://thebittimes.com/image/getimage/?url=https://insidebitcoins.com/wp-content/uploads/2023/05/wall-street-memes.svg" alt="Wall Street Memes" width="125" height="60"> 
      </noscript> 
     </div> 
     <div class="col-12 col-md-8"> 
      <ul class="inContentProviderSingle--list"> 
       <li>Early Access Presale Live Now</li> 
       <li>Established Community of Stocks &amp; Crypto Traders</li> 
       <li>Featured on BeInCrypto, Bitcoinist, Yahoo Finance</li> 
       <li>Rated Best Crypto to Buy Now In Meme Coin Sector</li> 
       <li>Team Behind OpenSea NFT Collection - Wall St Bulls</li> 
       <li>Tweets Replied to by Elon Musk</li> 
      </ul> 
     </div>  
     <div class="col-12 col-md-4 d-none d-sm-none d-md-block d-lg-block"> 
      <img class="inContentProviderSingle--img float-right" src="data:image/svg+xml,%3Csvg%20xmlns='//www.w3.org/2000/svg'%20viewBox='0%200%20125%2060'%3E%3C/svg%3E" alt="Wall Street Memes" width="125" height="60" data-lazy-src="https://thebittimes.com/image/getimage/?url=https://thebittimes.com/image/getimage/?url=https://insidebitcoins.com/wp-content/uploads/2023/05/wall-street-memes.svg"> 
      <noscript> 
       <img class="inContentProviderSingle--img float-right" src="https://thebittimes.com/image/getimage/?url=https://thebittimes.com/image/getimage/?url=https://insidebitcoins.com/wp-content/uploads/2023/05/wall-street-memes.svg" alt="Wall Street Memes" width="125" height="60"> 
      </noscript> 
     </div> 
    </div> 
    <div class="row"> 
     <div class="col-12 text-center"> 
      <div class="inContentProviderSingle--button">
        Learn More 
      </div> 
      <div class="inContentProviderSingle--disclaimerText"> 
      </div> 
     </div> 
    </div> 
   </div> 
  </div> 
 </div> 
 <div class="telegrame_cta_content"> 
  <div class="wrap"> 
   <div class="telegrame_cta_content_inr"> 
    <p>Join Our <u>Telegram </u>channel to stay up to date on breaking news coverage</p> 
   </div> 
  </div> 
 </div> 
</div>

US Tax Authority Says Income From Crypto Staking Rewards Taxable When Received

Table of Contents

TheBitTimes

Other articles published on Aug 1, 2023

Two Crypto Bills Pass US Congressional Committee

Bitcoin price risks $25K dip despite ‘macro pivot point’ — New analysis

Whale Shiba Inu Borong 1 Triliun SHIB dalam 8 Minggu

Crypto SHIB Diramalkan Menguat 300 Persen, Kapan?

Binance Japan Returns With 34 Token Listing and Spot-Trading Service

Bitcoin volume hits lowest since early 2021 amid fear $25K may return

Join our free newsletter for daily crypto updates!