The US tax agency denied arguments from a second lawsuit brought by Joshua and Jessica Jarrett over staking rewards.
The United States Internal Revenue Service (IRS) has reiterated its position that rewards from staking activities do not constitute new property, opposing a legal challenge that sought to defer taxes until rewards are sold or exchanged.
According to a Dec. 23 Bloomberg report, the agency denied arguments from a second lawsuit brought by Joshua Jarrett and his wife, Jessica Jarrett. The agency claimed that rewards constituted taxable income upon receipt. The IRS’ response states:
Staking is the process of locking up your cryptocurrency in a smart contract to help run a blockchain. By doing this, you help verify transactions and secure the network. In exchange, you earn rewards, usually in the form of more cryptocurrency. It’s a way to earn passive income from digital asset holdings.
