The IRS has made its crypto taxation rules simple: pay taxes on staking rewards when you get them. This new rule affects how every crypto tax guide handles staking rewards tax for U.S. investors. If you stake crypto, you need to know these changes.
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IRS Crypto Tax Rules: What You Need to Know About Staking Rewards
The New Rules
The IRS now taxes your crypto-staking rewards when they hit your wallet. “Understanding the rules can save you a lot of trouble with the IRS,” tax expert Scott Martin explains. You can’t wait to pay taxes until you sell these rewards anymore.
The Legal Fight
Joshua and Jessica Jarrett are fighting these cryptocurrency tax rules in court. They want their $12,179 back from taxes on 8,876 Tezos tokens. Their point? Staking rewards should be like growing crops – you pay taxes when you sell them and not when you grow them. Their case from 2021 could change everything.
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How It Works Now
The 2023 IRS crypto taxation rules say to use the market price when you receive rewards. Your crypto tax guide should explain this. The IRS wants you to track the value of each reward when it arrives in your wallet.
What It Means For You
“Paying and properly filing your crypto taxes is absolutely essential if you’re in crypto,” CryptoWendyO states clearly. The staking rewards tax rules apply to everyone who stakes crypto. Keep good records – the IRS checks everything carefully.
What Might Change
The Jarrett case could change how cryptocurrency tax rules work. If they win, it changes when crypto-staking rewards become taxable. This affects everyone who earns rewards through staking.
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What You Should Do
Track every staking reward you get. Write down when you get it and what it’s worth that day. Follow your crypto tax guide step by step. Save all your records, and also remember that having screenshots can truly help. The IRS might ask for proof later, so it is better to be safe than sorry.
