U.S. Tax Court Holds Cryptocurrency Staking Rewards Are Taxable Upon Receipt

The U.S. Tax Court held that cryptocurrency staking rewards are includible in gross income under I.R.C. §61 upon receipt, entering decision for the IRS. Taxpayer, a married couple, held tokens in a cryptocurrency using a proof-of-stake blockchain through a digital asset platform that automatically staked customers’ tokens and distributed monthly staking rewards, with Taxpayer receiving tokens valued at over $33,000 in 2021. The platform issued a Form 1099-MISC reporting the staking rewards as other income, but Taxpayer did not receive it and failed to report the income on their tax return. The court concluded that the taxpayers had complete dominion ...