tax

In the U.S., the IRS currently treats crypto staking rewards as ordinary income at the time you gain "dominion and control" over the assets, such as when they become transferable or spendable. A separate capital gains tax applies when the rewards are later sold or otherwise disposed of.

Current Tax Rules
Income Recognition: You must report the fair market value (FMV) of the staking rewards in U.S. dollars at the precise date and time you receive control over them. This amount is subject to your standard income tax rate.
Double Taxation Argument: Lawmakers and industry experts have criticized this approach, arguing it results in "double taxation" (once on receipt as income, and again on disposal as a capital gain) and creates significant administrative burdens for taxpayers.
Capital Gains: When you eventually sell, trade, or spend your staked rewards, you will incur a capital gain or loss based on the difference between the FMV at the time you originally received them (your cost basis) and the price at disposal.
Reporting: Individual taxpayers typically report staking income on Form 1040, Schedule 1 as "Other Income". If you dispose of the assets, you report the details on Form 8949 and summarize on Schedule D. Businesses report on Schedule C, which allows for deducting related expenses.

Legislative and Legal Review
Lawmaker Push for Reform: A bipartisan group of U.S. House lawmakers recently urged the IRS to revise its guidance before the 2026 tax year. They propose taxing staking rewards only at the time of sale to align with actual economic gain and reduce administrative complexity.
Ongoing Court Case: The legal challenge in Jarrett v. United States is ongoing, with taxpayers arguing that newly created tokens are self-created property and should only be taxed upon sale, similar to how mined minerals or harvested crops are treated. The IRS previously issued a refund in the initial case to make it moot but the taxpayers filed a new lawsuit in October 2024 to seek a final judicial ruling on the matter.
New Reporting Forms: Starting in 2026, custodial platforms will be required to issue a new Form 1099-DA to report digital asset sales and income, including staking rewards, which will increase scrutiny on reporting.

For the most accurate and up-to-date information, taxpayers should consult with a qualified crypto tax professional or refer to official IRS guidance available on the IRS website.

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The United States is under mounting pressure to rethink its outdated tax code for cryptocurrencies. According to Senator Mike Crapo of Idaho, the situation is becoming urgent—regulatory uncertainty is harming competitiveness, stifling innovation, and prompting capital and talent to relocate abroad.

Senator Crapo Warns: Tax Confusion Undermines U.S. Leadership and Revenue
In a public statement on December 15, Senator Crapo—ranking member of the Senate Finance Committee—highlighted the widespread confusion and compliance issues surrounding crypto taxation. He recalled that Congress had requested clarity over two years ago, in collaboration with Senator Ron Wyden. Industry responses, Crapo said, revealed a broken system.
“Persistent tax uncertainty makes the U.S. a less attractive place for business. It harms not just innovation, but tax compliance itself,” Crapo warned.

Risk of Capital Flight
Crapo stressed that if lawmakers don’t act soon, American crypto companies may move to jurisdictions with clearer, more favorable regulations. He also noted the lack of clarity around stablecoins, pointing out that even after the passage of the GENIUS Act, many crypto transactions remain legally undefined under current tax laws.

Coinbase Also Backs Tax Reform
Crapo referenced an October Senate hearing where Lawrence Zlatkin, global VP of Tax at Coinbase, warned that relying solely on IRS guidance is no longer viable. According to Zlatkin, clear legislation is urgently needed to provide certainty to businesses and investors operating in the digital asset space.

Trump Administration Started the Conversation — Now Congress Must Act
Crapo reminded the public that the Trump administration had kickstarted the discussion around crypto tax reform by establishing a presidential task force on digital markets in its first week in office. That task force later issued a report titled “Strengthening American Leadership in Digital Finance,” which included specific legislative recommendations on crypto taxation.

What’s at Stake?
Crapo warned that failure to modernize the tax code could have serious consequences:
U.S. companies may innovate elsewhereInvestors could divert capital offshoreAmerica risks losing its technological edgeAnd the Treasury stands to lose substantial federal revenue
“Our tax code must evolve. Crypto products are diverse and fast-moving—they can’t be forced into outdated categories,” Crapo concluded.

“It’s time for action.”

#USPolitics , #tax , #Stablecoins , #DigitalAssets , #CryptoNews

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Japan’s National Tax Agency (NTA) reported that cryptocurrency-related tax recoveries reached ¥4.6 billion in 2024, marking a 31.4% increase year-on-year. The agency conducted 613 on-site investigations, up 14.6% from last year, with crypto cases showing significantly higher recovered amounts per case than traditional income tax audits.

Authorities highlighted that key investigation areas now include profit and loss accuracy, complete transaction records, and complex activities such as DeFi, airdrops, mining, and staking. When multiple domestic and overseas exchanges are involved, taxpayers are required to aggregate all gains and losses, or risk being classified as unreported income.

The NTA has also expanded data collection and AI-assisted analysis to identify high-risk cases. Penalties remain strict: underreporting can trigger up to 20% additional tax, while intentional concealment may result in 35–40% penalties.

At the policy level, Japan is actively discussing shifting crypto taxation toward a separate 20% flat tax, similar to equities, with loss offsets and carryforwards — a reform direction expected to be clarified in the upcoming year-end tax framework.
#tax

🔹 The U.S. Treasury extends accounting maneuvers to avoid default

🔹 Court rulings on Trump-era tariffs could accelerate the debt crisis

🔹 Washington signals possible end to the 'revenge tax' amid global tax talks

The U.S. Treasury Department announced it will continue using emergency accounting measures to avoid breaching the debt ceiling, extending them through July 24, 2025. This gives lawmakers more time to reach a solution and avoid a potential national default.
Treasury Secretary Scott Bessent urged Congress to act without delay, warning that pending court rulings on Trump-era tariffs could push the U.S. closer to a financial breaking point, known as “X-date”—the moment when the government can no longer meet its financial obligations.

Emergency Measures Buy Time but Not a Solution
The Treasury confirmed that it is extending the period during which it can use “extraordinary accounting measures”—temporary tactics like suspending investments in federal programs or reallocating funds across government accounts—to stay under the statutory debt limit.
Bessent sent a formal letter to House Speaker Mike Johnson and other key congressional leaders, calling on them to act before the upcoming August recess. While these temporary steps help avoid an immediate crisis, Bessent emphasized they do not fix the root problem: the need to raise or suspend the debt ceiling.
Failing to act, he warned, could damage investor confidence and hurt the U.S. credit rating, with serious repercussions not only for the national economy but for global markets as well.

GOP Divisions Delay Action as Debt Threat Looms
Pressure is mounting on Republican lawmakers, who have so far failed to finalize a major tax and spending package due to internal disagreements over funding priorities.
If they don’t reach a deal soon, the Treasury could run out of options to keep paying bills without breaching the debt ceiling. The longer Congress delays, the higher the risk of market volatility, investor panic, and public distrust.

Court Rulings on Tariffs Could Shake Government Revenues
Adding to the uncertainty are ongoing legal challenges to Trump-era tariffs. These tariffs have generated $23 billion in revenue, which has helped bolster the Treasury’s cash reserves during this debt-restricted period.
However, a recent ruling from the U.S. Court of International Trade declared that some of these tariffs exceed presidential authority and lack a legal basis. If the Treasury is forced to stop collecting or even refund certain tariffs, the government could lose a key revenue stream at a critical time.
Such a development could move the X-date up by weeks, giving Congress significantly less time to act than current projections suggest.

Treasury Suggests End to 'Revenge Tax' Amid OECD Tax Progress
In a separate development, the Treasury is signaling that it may soon eliminate the controversial "revenge tax", as OECD-led global tax talks show real progress. Deputy Treasury Secretary Michael Faulkender stated that an international agreement may render the U.S. Section 899 provision—aimed at countries with digital service taxes—unnecessary.
Section 899, introduced under the Trump administration, is widely seen as a retaliatory measure. It would impose tax penalties on investors and firms in countries that the U.S. believes are discriminating against American tech giants like Google, Apple, and Amazon with digital taxes.
Countries such as France, Canada, and the United Kingdom have enacted such digital taxes. If a global agreement is reached, the U.S. may drop these retaliatory threats, potentially easing transatlantic tensions.

🔻 Summary
The U.S. Treasury is buying time—but market patience is limited. By extending emergency measures, it gives Congress breathing room, but pressure is mounting fast. If courts, tariffs, or political inaction converge, the U.S. could face a default crisis within weeks. Decisions made in the coming days could prove critical.

#USPolitics , #TRUMP , #Tariffs , #TradeWars , #tax

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Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“