IRS imposes new ruling in the taxation of crypto staking

On July 31st, the IRS issued the new Revenue Ruling 2023-14, formalizing their position concerning the taxation of income earned through the staking of cryptocurrency. As expected by many professionals familiarized with tax principles, the new ruling officially states that staking compensations must be included in a taxpayer’s gross income when they are received and not when they are sold, and its monetary amount should be presented in their Form 1040 as equal to the fair market value of the cryptocurrency rewarded at the date and time the taxpayer obtained it. This new ruling came as a consequence of the Jarrett case, in which these taxpayers alleged that the rewards they earned for staking cryptocurrency should not be taxed when they were received, but rather when those rewards were sold. Even though the case had a positive outcome for the Jarrets, it produced the necessary scenario for this new ruling.

If you would like to read more, please visit: https://www.forbes.com/sites/ambergray-fenner/2023/07/31/irs-rules-staking-rewards-are-taxable-when-received/?sh=18cc51494f99