The US Justifies Taxation of Crypto Staking
Date: 2024-12-25 Author: Gabriel Deangelo Categories: IN WORLD
These clarifications were a response to a class action lawsuit filed by crypto investors who believe that assets earned through staking represent a new form of property that should not be taxed until they are sold.
Crypto investors argue that tokens earned through staking are the result of their efforts, and therefore they should be classified as “new property.” In their opinion, such property should be taxed only after sale, as is the case with income from intellectual labor or the products of farmers.
However, the IRS takes the opposite view. In a statement, the agency notes that rewards received through staking or mining are considered taxable income at the time they are received. The amount of tax liability is determined by the current market value of crypto assets at the time of their creation.
These clarifications come amid changes to the accounting for crypto assets that were recently introduced by the Financial Accounting Standards Board (FASB). The new rules require the use of a fair value approach to valuing cryptocurrencies, which is intended to close a gap in corporate reporting. Previously, such assets were valued solely at their acquisition cost, which did not always reflect the real market situation.
