As it stands, the current IRS guidelines say that those who get crypto through staking need to account for taxes and pay as crypto is earned. These earnings are taxable as capital gains.
A lawsuit filed yesterday is making the case that crypto in staking is actually similar to things like mining gold or growing crops where when sold, it’s taxed as income.
Staking is where a user holds crypto funds in a wallet to participate in maintaining the operations of a proof-of-stake based blockchain system. It is similar to crypto mining in the sense that it helps a network achieve consensus while rewarding users who participate.
To help explain how staking is treated for tax purposes, Verady worked with the POS Alliance on a white paper.
To read the white paper, CLICK HERE.
Source: Read Full Article