In court filings expected to be made public Thursday, the IRS declared it would refund $3,293 in income tax (plus statutory interest) to a Nashville couple who had paid the amount on 8,876 Tezos tokens they had obtained through staking.
According to a May 2021 civil lawsuit filed by the couple, Joshua and Jessica Jarrett, any tokens gained through proof-of-stake should be considered “new property” created by the taxpayer—and therefore not income that “comes in” to the taxpayer. In order to be taxed, tokens gained through staking (or any other newly created property) must be first converted into a “readily accessible form of wealth”.
Thus, the lawsuit claims, until the tokens are sold, no taxable event has occurred.
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