US Internal Revenue Service makes it compulsory to pay tax on profits from staking

In addition, taxpayers will have to pay part of the profits from airdrops, hard forks, and mining

24.01.2023 - 09:30

546

2 min

What’s new? On January 20, the Internal Revenue Service (IRS) updated its information on dealing with cryptocurrencies. Taxpayers will now have to pay part of the profits from staking, airdrops, hard forks, and mining. According to the statement, transactions involving digital assets, as a rule, must be reported on a tax return.

Information on the IRS website

What else does the statement say? The agency qualifies digital assets as property, and the same tax principles apply to them as to real estate. The IRS considers convertible virtual currencies and cryptocurrencies, stablecoins, and non-fungible tokens (NFTs) to be digital assets.

Taxable gain or loss may arise from transactions including, but not limited to:

Sale of a digital asset for fiat
Exchange of a digital asset for property, goods, or services
Exchange or trade of one digital asset for another digital asset
Receipt of a digital asset as payment for goods or services
Receipt of a new digital asset as a result of a hard fork, an airdrop, mining, or staking activities
Receipt or transfer of a digital asset for free (without providing any consideration) that does not qualify as a bona fide gift
Transferring a digital asset as a bona fide gift if the donor exceeds the annual gift exclusion amount

In February 2022, the US Treasury Department announced plans to exempt miners, software developers, and staking pools from reporting to the IRS.

Author: