Cardano
$1.49 4.23%
ADA · 2w

Staking rewards subject to income tax.

Ok I am spitballing here but want to get everyones thoughts on this as I believe the IRS has no idea how cryptocurrencies and blockchain technology work and are just being their greedy selves and take everyones money. I also know the IRS won't see this so just hear me out though.. From my understanding, the IRS have stated that staking/mining rewards are taxed as income. However, I have no intention in exchanging rewards back into fiat so how would they expect someone to pay taxes on that if they have no fiat money to cover those taxes as its all earned and KEPT in crypto? If exchanged for fiat, then pay taxes as normal. If not exchanged to fiat, then what? For example, lets say for over the course of 1 year the average price in ADA was $1.80 and the delegator received 10,000 ADA in rewards for the year. That would be about $18k. Even if on Dec 31 the price of ADA was $5, the delegator would only be responsible to pay income tax on the $18k. If they want to tax crypto rewards as income they better find a way to accept taxed crypto rewards to be paid in crypto equivalent to the price when received. Don't you think if the IRS is going to tax crypto staking rewards as income it should be paid to them in crypto? Since many cryptocurrencies offer staking or mining rewards, I think the IRS should be looking to building a smart contract that is able to handle this. User could pay the required ADA amount that equals the tax amount and keep the record of it through the Tx ID and then enter that Tx ID, amount paid, and amount in ADA on their tax form when filing for confirmation. Is this plausible? Again, just spitballing ideas and thoughts....
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