Crypto glossary
Taxation of staking rewards
Staking rewards are usually taxed as income when received, at their market value, and taxed again as a capital gain or loss when later sold.
Most tax authorities treat newly received staking rewards like other income in kind. Their market value at the time the taxpayer gains control over them is taxable, and that same value becomes their cost basis. When the tokens are later sold or swapped, any difference from that basis is a capital gain or loss.
In the US, IRS Revenue Ruling 2023-14 confirmed that cash-method taxpayers include staking rewards in gross income in the year they gain dominion and control over them, though litigation has challenged whether newly created tokens should be income before sale. In Spain, the tax agency's binding rulings have classified staking rewards as income from movable capital (rendimientos del capital mobiliario) in the savings base, valued at market price on receipt. Mining is treated differently and can be an economic activity if carried out in an organised way.
Practical difficulties include valuing small rewards credited every few minutes, liquid staking tokens whose value grows instead of paying rewards, and protocols that lock rewards for a period.
Example
A Spanish resident receives 0.2 ETH in staking rewards over a year, worth 600 euros on the days received. She declares 600 euros as capital income, and if she later sells the ETH for 700, she declares a 100-euro gain.