PANews reported on December 24 that according to Bloomberg, the U.S. Internal Revenue Service (IRS) once again insisted that cryptocurrency staking is taxable, stating that staking rewards will incur tax obligations once received. This news comes during the legal proceedings between Tennessee couple Joshua and Jessica Jarrett and the IRS over staking tax issues. The couple staked on the Tezos network and argued that staking rewards should not be taxed before they are sold.
In a court filing on Dec. 20, the IRS rejected the Jarretts’ claim that staking creates “new property” that is taxable only when sold. The government said that “once the cryptocurrency is pledged, the tax liability immediately arises.” The case is currently being closely watched by the cryptocurrency industry and could have a significant impact on how staking rewards on all proof-of-stake blockchains in the United States are taxed.
According to guidance released by the IRS in 2023, block rewards obtained from staking or mining are considered taxable income when they are generated, and the tax liability is based on their market value when they are generated.
