BDO Insights
As a result of the Revenue Ruling, taxpayers would be well-advised to assess current and past staking rewards and consider at which point they obtained possession for tax purposes (dominion and control), and, therefore, when such rewards became taxable.
The release of the ruling comes as litigation regarding staking rewards continues to play out in Jarrett v. United States, No. 22-6023 (6th Cir. 2023). The taxpayer’s argument in Jarrett is that staking rewards are akin to self-created property (such as mineral extraction from a mine) and therefore should not be taxed until the ultimate disposition of the property. The case recently went through oral arguments in the Sixth Circuit.
