If you are a U.S. taxpayer and you earn crypto by staking, the IRS treats it like this:

1️⃣ When you receive staking rewards

👉 It is taxed as income

  • The moment staking rewards become available for you to use, sell, or move, the IRS says:

    “That’s income.”

  • You must report the USD value of the reward at that moment.

  • This is similar to getting paid a salary or interest.

Example:
You earn staking rewards worth $100 today →
You owe income tax on $100, even if you don’t sell it.

2️⃣ When you sell later

👉 Capital gains tax applies

  • That same reward now has a cost price (the value when you received it).

  • If you sell it later:

    • Sell higher → you pay capital gains tax

    • Sell lower → you report a loss

Example:

  • You received $100 worth of tokens

  • Later sell them for $130

  • You pay capital gains tax on $30

3️⃣ Why people say this feels unfair

Many crypto users argue this is double taxation:

  1. Taxed when you receive rewards

  2. Taxed again if price goes up before selling

Lawmakers are asking the IRS to change this, so tax happens only when you sell, but for now the current rule still applies.

4️⃣ Important things to remember

✔ You owe tax even if you don’t sell
✔ Locked rewards are usually taxed only when unlocked
✔ Poor record-keeping can cause IRS trouble
✔ Some platforms send tax forms, but you are still responsible

🔑 One-line summary

In the U.S., staking rewards are taxed as income when you receive them, and taxed again as capital gains if you sell them later at a higher price.

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