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Results for “Staking income vs Capital gains”
Staking income
Staking income is the reward you receive for locking up coins to help validate a proof-of-stake blockchain. In the US, the IRS treats these rewards as ordinary income, valued at fair market value when you gain control of them, whether you stake directly or through an exchange.
What it means for you. In the US, staking rewards can count as income in the tax year you can first sell or move them, even if you keep them and their price later falls, so the date and dollar value of each reward matter. Selling or swapping the rewarded coins later is a separate taxable event.
Sources: IRS: Revenue Ruling 2023-14 (staking rewards), IRS: Digital assets, SEC and CFTC: Application of the Federal Securities Laws to Certain Types of Crypto Assets (Release 33-11412, 2026) · checked 4 October 2026
Capital gains
A capital gain is the profit when you sell or swap an asset for more than its cost basis — what you paid, including fees. Selling for less produces a capital loss. In the US, the IRS treats crypto as property, so these rules apply to it.
What it means for you. In the US, how long you held a coin sets the treatment: one year or less is short-term, taxed at ordinary income rates; more than one year is long-term, taxed at lower rates. Net capital losses offset gains, only a limited amount can be deducted against other income each year, and the rest carries forward to later years.
Sources: IRS: Frequently asked questions on virtual currency transactions, IRS Topic 409: Capital gains and losses · checked 4 October 2026