Tax authorities around the world have been slow to provide clear guidance on the taxation of cryptocurrency, including any rewards from the staking of such currencies.
From a US tax perspective, there’s no specific Internal Revenue Service (“IRS”) guidance on staking. However, the IRS guidance on mining supports that there could still be tax implications for staking rewards because of its similarity to mining in accordance with the IRS Notice 2014-21.
As a result, Uphold will follow the IRS Notice for reporting purposes.
Given the uncertainty that exists with regards to tax reporting around cryptocurrency transactions in various jurisdictions, we recommend you discuss the tax implications of your staking activity with your tax advisor.