The rewards received as a result of blockchain coins in Proof-of-Stake networks should be included in the calculation of taxable income. This follows from the draft supplement to the IRS regulations.
“The fair market value of validation rewards received shall be included in the taxpayer’s gross income in the taxable year in which the taxpayer obtains control over such payments,” the document says.
The IRS initiative follows the SEC’s claims against local cryptocurrency exchanges regarding the legality of staking programs.
In February 2023, Kraken settled charges brought by the Commission over a similar service that the platform had not registered. The company paid a $30 million fine.
In July, a US court ordered Kraken to hand over customer information to the IRS. The platform will have to disclose the names, dates of birth, actual addresses, phone numbers and Tax IDs of users who conducted transactions worth more than $20,000 in a calendar year.
A month earlier, the SEC filed a lawsuit against Coinbase. In the crosshairs of the regulator fell under the scope of the Coinbase Earn steaking program.
Recall, in March 2023, U.S. President Joe Biden proposed to collect taxes from crypto-investors for $24 billion.