Any bookkeeping, business or tax article contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor can it be used to avoid tax-related penalties. If desired, we would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.

Tax Treatment of Cryptocurrency

Tax Treatment of Cryptocurrency

Questions surrounding the tax treatment of cryptocurrency are complex. According to the recent IRS Revenue Ruling 2023-14, the process of verifying ownership of cryptocurrency is called “ staking.” And when a taxpayer has successfully staked his or her units of cryptocurrency, he or she may also receive “ staking rewards” consisting of additional units.

When does the taxpayer have to include those staking rewards in gross income? A cash-basis taxpayer is said to “ gain dominion” over staking rewards received when he or she can sell, exchange or dispose of them. In the year that the taxpayer gains dominion over the rewards, the fair market value of the rewards must be included in gross income.

Questions?

Got some more questions? Don’t forget to contact the office or send us an email.

tax treatment of cryptocurrency

SHARE THIS POST NOW:
Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on print

Read more

Common Mistakes in Claiming Home Office Deduction When applying for the home office deduction, it’s important to …

What Expenses Can’t Be Written Off by Your Business? If you check the Internal Revenue Code, you …

Does the Corporate Transparency Act Apply to Your Business? Under the Corporate Transparency Act (CTA), many businesses …

CONNECT WITH US TODAY!

Address:
24044 Cinco Village Center Blvd #100

Katy, TX 77494

Phone:
(713)-855-8035

Email:
admin@fas-accountingsolutions.com

Sign up for our Newsletter 

Let’s stay connected! You will receive updates straight to your inbox.