US Imposes Tax on Bitcoin & Cryptocurrency Staking Earnings

• The US tax regulator, IRS, has declared that cryptocurrency staking services are subject to taxation.
• Staking revenues are taxable after they are received, according to the IRS.
• The IRS had previously made a similar decision regarding mining revenues.

The US Internal Revenue Service (IRS) has announced that revenues from cryptocurrency staking services are taxable, a decision that mirrors their previous stance on mining revenues.

Taxation of Staking Revenues in the US

The IRS has released its decision regarding the taxation of cryptocurrency staking services. The US tax authority will require taxpayers to report their staking earnings as gross income. This means that investors will have to report their cryptocurrency staking revenues as gross income for the year they were received. This decision will apply to both direct cryptocurrencies and assets on centralized exchanges.

The decision stipulates that staking earnings should be included in annual income at fair market value and determined when the assets are received. The fair market value is determined based on the price of the asset during the period it was received.

IRS’s Previous Stance on Cryptocurrency

The IRS had previously subjected cryptocurrency mining earnings to both income and capital gains tax. Ryan Selkis, the founder of Messari, stated that the IRS is treating crypto staking like stock dividends.

Regulatory Pressure on Cryptocurrency in the US

The IRS’s decision comes at a time when pressure is mounting in the US regarding cryptocurrency regulations. Regulatory bodies have been accusing cryptocurrency staking services and exchanges of illegal securities trading.

Conclusion

The IRS’s decision to tax staking revenues is a significant development in the evolving landscape of cryptocurrency regulation in the US. As the IRS continues to treat cryptocurrency more like traditional assets, investors and stakeholders in the crypto space will need to adapt to these changing regulations.