Showing posts from August, 2023

New Revenue Ruling on Staking Income

  Disclaimer On August 1, 2023, the IRS issued a new Revenue Ruling ( Rev. Rul. 2023-14 ) holding that income received from delegating tokens to a validator (" Staking Income ") is taxable at the time the taxpayer has "dominion and control" over the newly received tokens. No one I know thought that was a surprise.  Arguments that staked tokens were like self created intellectual property or agricultural produce (and therefore not taxable until sold) were theoretically possible (and certainly seem to apply to genesis block tokens held by founders), but they were always a stretch.  Arguments that tokens received from staking were like stock splits or simply inflationary (slicing the pizza into more pieces) denied Treasury's fundamental need to have a clear measurement date and benchmark. The meaning of "Dominion and Control" is discussed in Rev. Rule 2019-24, which can be found here , in the context of hard forks, but if there ever was any doubt, the ne