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The Internal Revenue Service (IRS), the leading tax authority in the United States, recently released Revenue Ruling 2023-14, providing clarity on the taxation of income derived from crypto staking.&nbsp; 
The ruling categorizes cryptocurrency staking rewards, along with various other income sources such as money, property, and services, as gross income, necessitating their reporting in the year they were obtained. 
<h2 class="wp-block-heading" id="new-guidance">New guidance</h2> 
The Internal Revenue Service (IRS), the United States’ primary tax authority, has issued <a href="https://www.irs.gov/pub/irs-drop/rr-23-14.pdf" target="_blank" rel="noopener noreferrer nofollow">Revenue Ruling 2023-14</a>, offering guidance on the taxation of income generated through <a href="https://crypto.news/tag/staking/" rel="noopener noreferrer nofollow">crypto staking</a>, a process where users can pledge their cryptocurrency toward validating blockchain transactions in exchange for a reward. 
Under this government ruling, cryptocurrency staking rewards, along with money, property, and services received, are now classified as gross income, meaning&nbsp; taxpayers must report them in the year they were earned. This clarification aims to bring greater transparency and compliance to the taxation of crypto-related activities. 
 You might also like: <a href="https://crypto.news/kraken-receives-court-order-to-turn-over-customer-data-to-irs/" rel="noopener noreferrer nofollow"> Kraken receives court order to turn over customer data to IRS </a> 
The IRS has provided specific guidelines on calculating taxable income from crypto rewards, stating that taxpayers should determine the fair market value of the received assets at the time of receipt. This value must then be added to the individual’s annual income for the relevant tax year. 
Importantly, the ruling extends its application to both cash-method taxpayers directly staking cryptocurrency and those staking through centralized crypto exchanges, ensuring uniformity in tax treatment across different staking methods. 
<h2 class="wp-block-heading" id="one-step-closer-to-regulatory-clarity">One step closer to regulatory clarity</h2> 
The clarification becomes necessary as the <a href="https://crypto.news/tag/sec/" rel="noopener noreferrer nofollow">SEC</a> raises the gun at major exchanges in the United States, triggering a ripple effect for regulation across the globe, with many countries looking at this example when applying their own laws and guidelines. 
On July 24, the United States House Financial Services Committee (FSC) made a 35–15 vote to <a href="https://www.congress.gov/bill/118th-congress/house-bill/4763?q=%7B%22search%22%3A%5B%22Financial+Innovation+and+Technology+for+the+21st+Century+Act.%22%5D%7D&amp;s=1&amp;r=1" target="_blank" rel="noopener noreferrer nofollow">approve</a> the Financial Innovation and Technology for the 21st Century Act, which aims to establish clear registration rules for crypto firms under either the CFTC or the SEC. 
Around the same time, in a July 26 press release, <a href="https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=408940#:~:text=H.R.%201747%2C%20the%20%E2%80%9CBlockchain%20Regulatory,service%20businesses%20under%20the%20law." target="_blank" rel="noopener noreferrer nofollow">the bipartisan Blockchain Regulatory Certainty Act</a> also received approval in the FSC vote. This act is said to streamline guidelines and eliminate obstacles for “blockchain developers and service providers,” including miners, multisignature service providers, and decentralized finance platforms, promoting a more conducive environment for innovation in the blockchain space. 
 Read more: <a href="https://crypto.news/irs-claims-44b-in-taxes-from-bankrupt-ftx-and-its-subsidiaries/" rel="noopener noreferrer nofollow"> IRS claims $44b in taxes from bankrupt FTX and its subsidiaries </a>

Staking rewards are now taxable, says IRS

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