For individuals hoping to earn new tokens by providing security to large blockchains that use proof-of-stake, there may be good news ahead. IRS will not tax your unstaked crypto.
A Nashville couple argued in May that tokens obtained through proof-of-stake protocols are taxpayer-created property that should not be taxed until they are sold or exchanged. The choice to refund may help to clarify the POS tax in the future.
According to a civil lawsuit filed on May 26, 2021 with the US District Court for the Middle District of Tennessee, Joshua and Jessica Jerrett asked for a refund of $3,293 in income tax paid in 2019 for the receipt of 8,876 Tezos tokens. In addition, the pair requested a $500 increase in tax credits to compensate for lost income.
