The IRS is looking at Proof-of-Stake (PoS) coins in their latest ruling. If a user stakes their cryptocurrency in a PoS system they may receive rewards from the network to do so. These reward may unlock immediately or be held in custody by the network and later unlocked similar to a certified deposit or a bond reaching maturity. The IRS has deemed once the user is able to trade the staking rewards for other cryptocurrencies or currency then it is considered taxable income at that point. This is in line with the normal 1099-MISC rules for when say you earn a free stock when signing up for Public.
Why is this significant? In the past there was some ambiguity also cryptocurrency is highly volatile and the taxes could exceed the sell price of the rewarded asset. Since the cost basis is nothing, except the opportunity cost of staking, you’re on the hook unless you have write offs elsewhere; but consult with a real accountant and not a cartoon wallet on the internet about these matters.
This ruling authored by Alina Lewandowski comes on the heels of the credit rating of the US being dropped from AAA to AA by a third financial authority this year (Fitch Ratings). In typically Stoked Wallet fashion we will be shit posting into the abyss. Three more weeks until the big fireworks show chuds.
