Staking and the IRS

I don’t know if this is already a thing or has been adressed but I was wondering if when we get our “stake” after each epoch will the USD value be shown?
If not that is something I would like to see. in the U.S were going to have to report it to the IRS and it would be nice if when I relieved my ADA from staking each week it had the real time value kinda stamped with it so it will be easy to keep for my records instead of me having to guess and hope for the best.

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I think it will be the responsibility of the stake recipient to report the value of income earned properly to the US Internal Revenue Service. It’s just earned income in my opinion.

This is not tax advice.

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I 100% agree with you that it is our responsibility. when I or anyone else buys ADA it is easy to record because we are the ones doing it at the exact moment so we can see the current price. What I am saying is that when our staking rewards enter our wallets each week we will not know the exact price of ADA at the moment. so what would be nice is when the stake pool automatically distributes the ADA to everyones wallet it shows what the real time value of the ada was at the moment it distributed them kinda f like a time stamp.
so say I am sleeping when it hits my wallet at 2am (don’t know what the time will actually be) I don’t have to worry about what the exact price was at 2am because it will hopefully appear as say “4 ADA at $0.065” or something like that. especially for individuals who are HODLing and don’t check what the rewards are each week. does that make sense? a feature that will without a doubt reduce anxiety when it comes to filing tax returns or if someone was getting audited.

I don’t think you will be tax liable, before one exchanges units to fiat (crypto-bank), till than (I believe) your identity is protected/anonymous and account ownership is fluid.

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They are 2 distinctly different taxable events. When your coins appreciate in value and you exchange or sell them for fiat you pay capital gains tax on the amount that the coin appreciated. When you get a staking reward it is considered income so you pay income tax. If you hold coins that were staking rewards and they appreciate in value then you sell them you owe income tax based on the value when you got them (assuming you didn’t pay the tax already) AND capital gains on the amount that it increased. This is all assuming you live in the USA.


it appears I will have to look more into this. thank you for your responses

Thinker669, I agree with you 100% about this tax issue. It is NOT a trivial issue. Moreover, this not just a USA issue. This is true of many countries with similar Investment tax structures. Every other financial asset has a price attached whenever it is bought or sold and forms the basis for the Tax liability assessments. It would be a nightmare for staking holders to manage over an entire year random staking rewards they would receive from different stake pools which they can switch to, whenever they so choose. Moreover, which Crypto Exchange pricing will one use given they have different values? If Cardano stipulates the default Crypto Exchange it is using and provides the ADA value at the point of distribution based on the nominated Crypto Exchange as per your suggestion than the data can be pulled into a spreadsheet or accounting system for auto-calculation of capital gains and or income earned. This will be a majorly attractive mass adoption feature because it eliminates the fear of the long arm of the Tax Authorities.


I honestly did not think about how exchanges are at different prices and the need for one universal price at the time of the rewards coming in. it will be an audited nightmare if the IRS decides that the exchange price you used was not the “correct” one the you should have used.

@SebastienGllmt i’m just curious if you if something like this is being discussed within the cardano team?

Hard to believe that IRS will audit, events within blockchain, the only thing what they can do is audit crypto banks which are associated with cotin2fiat conversion, and request full metadata disclosure. Apropos taxes:

From IRS virtual currency guidelines Notice 2014-21:

For federal tax purposes,
virtual currency is treated as
property. General tax
principles applicable to
property transactions apply to
transactions using virtual

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I agree with you. My understanding is that you’d be taxed for the USD value of your rewards at the time of receiving them.

If you never sell then you’d pay taxes on the USD amount of rewards at the time of receiving. If you do, you would also report capital gains/losses with the USD reward amount at the time of receipt becoming your tax cost basis.

This should be the basic feature of the Yoroi and Daedalus wallets—a downloadable history of rewards in USD. I’d say it is crucial that we have this feature, given that many investors are US-based.

You should also be able to pick your exchange or select the average of several of them.

I hope they add this to their feature list. That would set them apart from the pack. @emurgo_nico @SebastienGllmt

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I live in the US and one of my biggest worries in life is to correctly pay taxes haha. That’s why I pushed to add the export function in Yoroi with a specific format that is compatible with some tax platform like

I agree with a feature of that sort. We are already working in the price feature for Yoroi. It shouldn’t be too difficult, because we already have it for Seiza. But once we have support for Testnet Staking, we will worry about also extending this feature to do rewards.

thanks for tagging me :slight_smile:


If will be real, staking will be a real pain in the ass for US cityzens

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I don’t think any of the existing PoS coins have this functionality, certainly none that I use. My guess is that this issue will be solved by the crypto tax software providers adding this to their functionality. They already automatically convert crypto values to fiat values for other imported transactions so there just needs to be a way of importing a spreadsheet of transactions for into the software and for it to look for stake or mine rewards and calculate accordingly.
Also do the IRS want to know about all stake rewards as in the UK the HMRC are only interested if the total rewards go over £1000 for the tax year?

I agree it should be fairly easy to import data into a variety of crypto tax software platforms. Staking rewards show up as regular income so they would be added to whatever other income you make that year and taxed at whatever income bracket you fall into.

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