Court victory precedent: IRS may not tax staking rewards until sold
The Nashville couple’s case against the IRS compared unclaimed and unsold crypto rewards to an unsold book from a writer, and will be rewarded a refund with interest for tax paid. A Nashville couple’s lawsuit over taxes they paid on unclaimed and unsold Tezos staking rewards is coming to an end with the Internal Revenue Service (IRS) agreeing to issue them a refund.The decision may set a precedent for future guidance on how crypto rewards earned through staking are taxed. At present Proof-of-Stake staking rewards are classified as income, with tax payable as they are gained. The new....
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The Tezos validator who took the IRS to court argues that staking rewards should be treated as created property rather than income. A United States couple suing the federal tax agency over Tezos (XTZ) staking rewards taxation chose to forego a tactical victory and engage in a court battle that could eventually result in policy change.Joshua and Jessica Jarrett, who run a node on the Tezos network (thus “baking” new blocks, in the ecosystem’s lingo), have sued the Internal Revenue Service (IRS) over the taxes paid on the XTZ tokens created in 2019. The Jarretts filed a refund claim on....
Ethereum staking is the backbone of the new network and users have been earning rewards by staking their ETH ahead of the merge. As time has gone on, rewards for staking have reduced, with the current rewards sitting around 4-5% for stakers. However, crypto exchange Coinbase sees this changing for the better once the merge […]
Crypto staking rewards Thanks to its high yields, crypto staking, a way to earn passive income, has quickly become popular with crypto holders. Staking is a process in which nodes stake their tokens and create blocks to participate in the maintenance of the blockchain network. In addition, the rewards a node receives from the network […]
A Miami, Florida, trial court recently dismissed a criminal case against a defendant who had sold bitcoin to a police detective as part of an undercover investigation. The case, Florida v Espinosa, has been already been cited by some potentially important precedent for future cases, particularly those where bitcoin's status as "money" or "currency" is at issue. Bitcoin industry advocates will also cite the case when arguing for legislative reform and greater regulatory clarity. But, as legal precedent, Espinosa's value may be limited. It’s a single decision from a....
There is yet to be a conclusive court ruling regarding the taxation of staked crypto rewards; however, a recent case demonstrates industry progression. In May 2021, a Nashville couple known as the Jarretts filed a lawsuit against the United States Internal Revenue Service (IRS) over taxes they had paid on unclaimed and unsold Tezos (XTZ) staking rewards. At the beginning of February, news broke that the lawsuit filed by the Jarretts had come to an end, resulting in the IRS issuing the couple a tax refund for $3,793. Confusion among crypto holdersNot long after this news made headlines,....