Big Relief for Crypto Stakers and Miners, IRS Won’t Tax Unsold Crypto Tokens
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Crypto Stakers and miners could finally breathe a major sigh of relief as the IRS has decided not to tax unrealized gains derived from crypto staking or mining digital assets. This has been a major relief as many crypto proponents have been voicing their opinion against these proposed taxes over the last few months.
Blockworks’ Casey Wagner was the first to report this story. She writes that a Nashville couple will receive a refund on taxes related to unsold tokens, staked on the Tezos blockchain network. This puts some clarity on the tax treatment of the staked cryptocurrencies.
People familiar with the matter said that the IRS has offered to refund the couple for rewards gained, but not redeemed. Furthermore, report Wagner writes:
In May 2021, Joshua and Jessica Jerrett requested a refund of $3,293 of income tax paid in 2019 for the receipt of 8,876 Tezos tokens, according to a legal complaint filed on May 26, 2021, with the US District Court for the Middle District of Tennessee. The couple also sought a $500 increase in tax credits for lost income.
In their defense, the couple argued that token rewards gained through PoS protocols are ‘taxpayer-created property’. Thus, under the IRS code and regulation, they are not liable for taxation until sold. Blockworks reported that official court filings will become public on Thursday, February 3.
The State of Crypto Taxation Across the World
Although cryptocurrencies are traded globally, different jurisdictions handle crypto taxation differently. India has recently announced a 30% tax on crypto during its recent budget session on February 1. Indian PM Narendra Modi has further asked the G20 nations for a joint effort to regulate digital assets and have a common framework.
However, just on the day that India levied heavy taxes on crypto, Thailand decided to scrap a 15% capital gains tax on crypto following a heavy public backlash. Furthermore, a recent report also suggests that cryptocurrencies will be tax-free in Portugal.
Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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