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  • Cryptocurrency Tax Guide for US Individuals
    • Virtual Currency & Cryptocurrency
    • Who are Recap?
  • CRYPTOCURRENCY TAX
    • Do I Need to Pay Tax on my Crypto?
    • Which Taxes Apply?
      • Capital Gains Tax (CGT)
      • Income Tax
      • Non-Taxable Transactions
    • How Much Tax Will I Pay?
    • Capital Gains Tax
      • Calculating the Capital Gains and Losses
      • Cost Basis Methods
      • Disposal proceeds
        • Non Taxable Events
        • Taxable Events
        • Donating cryptocurrency to a charitable organization
        • Gifting cryptocurrency to another person
    • Income Tax
      • Receiving cryptocurrency from mining
      • Receiving cryptocurrency rewards
      • Forks
      • Airdrops
      • Tax on Tokenswaps and Mainnetswaps
    • Deductibles and Reducing Capital Gains
  • TRANSACTION TYPES
    • 💷Selling Crypto for Fiat
    • 🛍️Purchases using Crypto
    • 🔄Exchanging one crypto for a different crypto
    • 🎗️Donations to Qualified Charities
    • 🎁Gifts
    • 🎈Airdrops
    • 🤝Staking
    • 💸Transfers
    • 🍴Forks
    • ⛏️Mining
    • 👛Employment income
    • 🚨Lost & Stolen Crypto
    • 💧Liquidity Pools
    • 🔮Cryptoasset derivatives (CFDs, Futures and Margin Trading)
    • 💼Crypto Loans
    • 💎Lending Rewards
    • 🪞Reflections Rewards
    • 👥Referral Income
    • 💳Cashback
    • 🎨NFTs (Non Fungible Tokens)
    • 🎮Play-to-earn gaming NFTs
  • Record Keeping
  • Reporting Income and Gains to the IRS and Paying the Tax
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On this page
  • What is a Lending Reward?
  • How are Lending Rewards Taxed?
  • Income Tax
  • Capital Gains Tax
  • Lending Rewards in Recap

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  1. TRANSACTION TYPES

Lending Rewards

PreviousCrypto LoansNextReflections Rewards

Last updated 3 years ago

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What is a Lending Reward?

Lending rewards are received in exchange for loaning out a cryptoasset.

How are Lending Rewards Taxed?

There is no IRS guidance on lending rewards, so you would need to examine the details of the transactions you are undertaking to determine the tax treatment.

Income Tax

Following the IRS' tax treatment of staking, it seems clear that lending rewards will be subject to income tax. The USD value of the rewards (usually crypto tokens) at the date of receipt will be the value of the taxable miscellaneous income.

Capital Gains Tax

The USD value of the reward at the date of receipt is the capital gains tax acquisition cost of the tokens; to be deducted from the proceeds of a later disposal of the tokens (which is subject to capital gains tax).

Lending Rewards in

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