Revenue Ruling 2023-14 holds that a cash-method taxpayer who receives staking rewards must include their fair market value in gross income in the year the taxpayer gains dominion and control over them.
The ruling addressed the argument, litigated in the Jarrett case, that staking rewards should be taxed only when sold. The IRS position is that rewards are income when the taxpayer can transfer, sell, or otherwise dispose of them.
Why it matters: it settles the timing question for most stakers and sets the basis of the rewarded tokens at their value on that date. See staking rewards.
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