IRS Said Unsold, Staked Crypto Won't Be Taxed

by in Cryptocurrency News

lawsuit crypto crypto tax

Rules for tax on crypto have been uncertain in the US. As a result of a lawsuit, started in May 2021, the Internal Revenue Service said that it would refund $3,293 in income tax (and statutory interest) to a Nashville couple. Previously, the couple had paid the amount on 8.876 Tezos tokens they had earned via staking.

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The couple from Tennessee, Joshua and Jessica Jarrett filed a court complaint and petitioned for a refund. Tezos is a Proof-of-Stake blockchain and the Jannets received returns for participating in the process of creating new blocks. They mentioned that the assets should be viewed as new property created by the taxpayer and not income. The US law defines new property isn’t a form of income.

Thus, the tokens would become a subject of tax when they are sold, exchanged and are readily accessible.

While 2021 tax filing season will begin on February 12, the crypto community discusses the case and whether the agency will update its official guideline.