Staking is where you can stake some of your crypto to contribute to the Proof of Stake network of that asset. As a reward, you earn more assets from the network at a percentage rate over time.
There has been no official guidance on Staking from the IRS and as such we recommend that you speak with your tax attorney or accountant about the best way to file your return.
In general, the IRS considers any increase in value that you receive as income. So, if you receive rewards, it is generally taxed as income at the fair market value at the time received.
Example: Louise is awarded 0.5 ETH for staking activities on 03/01/2022. When this ETH arrives in her wallet, she checks the current market value of that asset ($3k). $3k is recorded as ordinary income.
Recap has been designed to work out the taxable impact of staking based transactions.
Simply connect your exchange accounts or wallets through our automated integrations or enter your data manually via the user interface or CSV file.
Recap only creates taxable events for staking reward transactions, generating acquisition and income tax events based on the asset's market value (determined by Recap's valuation engine using both foreign and cryptocurrency exchange rates).
See the tax impact of every staking reward transaction (example below) in the tax tab or download a PDF tax report