IRS Makes New Rule On Cryptocurrency
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December 27, 2024 8:22 am
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The IRS has made a new change to its cryptocurrency taxation rules.
The IRS has decided cryptocurrency holders who stake their cryptocurrency will have to pay taxes as soon as they hit their wallet.
In a December 20 court filing, the IRS stated“staking a cryptocurrency should induce a tax liability as soon as it is done.”
The filing by the IRS comes after a couple in Tennessee who are arguing that staking rewards should not be taxed until they are sold.
IRS says crypto staking is taxable. pic.twitter.com/NKmBAwqL5i
— 𝗕𝗮𝗻𝗸XRP (@BankXRP) December 23, 2024
Per Yahoo Finance:
The U.S. Internal Revenue Service (IRS) has doubled down on its stance that crypto staking is taxable, stating that tax liabilities arise as soon as staking rewards are received, Bloomberg reported.
This comes amid an ongoing legal battle with Joshua and Jessica Jarrett, a Tennessee couple staking on the Tezos network, who argue that staking rewards should not be taxed until sold.
In a Dec. 20 court filing, the IRS rejected the Jarretts’ claim that staking generates “new property” that should only be taxed when sold. The government said that “staking a cryptocurrency should induce a tax liability as soon as it is done,” denying the notion that staking tokens fall under the same category as crops, books, or manufactured goods.The case, now being closely watched by the crypto industry, could have significant implications for how staking rewards across all proof-of-stake blockchains are taxed in the United States.
JUST IN: 🇺🇸 IRS says crypto staking is taxable.
— Watcher.Guru (@WatcherGuru) December 23, 2024
Per Watcher.Guru:
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.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.
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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