A Guide to the Taxation of Crypto Staking and How Investors Can Calculate Their Basis In Staking Rewards

A Guide to the Taxation of Crypto Staking and How Investors Can Calculate Their Basis In Staking Rewards

Tax Law
By Anthony Diosdi and Kerrin Liu Just over a year ago, a couple from Tennessee fully paid taxes associated with Tezos network staking rewards earned. The couple then filed suit in federal district court in the middle district of Tennessee seeking a refund of the taxes paid associated with Tezos network. See Joshua Jarrett et ux. V. United States, No. 3:21-cv-00419 (M.D. Tenn. 2021)(May 26, 2021). Rather than allowing the case to move forward in the court, recently, the Internal Revenue Service (“IRS”) conceded the case. The concession prevents the court from issuing much needed guidance in this area. This article discusses the current state of the taxation of staking and how investors can calculate their basis in staking rewards. An Overview of Crypto StakingCryptocurrency staking takes place when an…
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