Crypto Staking Taxes Explained

Crypto staking rewards are ordinary income when you receive them, per IRS Rev. Rul. 2023-14. How staking taxes work, when income triggers, and cost basis.

Updated July 2026 · Reviewed by the PipeFlare team · Educational only, not financial advice

In the US, crypto staking rewards are taxed as ordinary income at their fair market value the moment you gain dominion and control over them, per IRS Rev. Rul. 2023-14.

Staking creates a taxable event before you ever sell. You owe income tax on rewards when they land, then capital gains tax later when you sell them — two separate events most stakers miss.

Overview

In the United States, crypto staking rewards are taxed as ordinary income at their fair market value the moment you gain dominion and control over them. This is the rule set by IRS Revenue Ruling 2023-14, issued on July 31, 2023. This page is educational only and not tax advice — talk to a tax professional about your situation.

"Dominion and control" means the point at which you can sell, transfer, or otherwise use the reward. For most stakers, that is when the reward lands in your account and becomes available. The value on that date is your taxable income.

The ruling applies whether you stake directly or through a centralized exchange. It covers proof-of-stake rewards you earn for helping validate a blockchain. It does not carve out an exception for rewards you simply leave unstaked or unsold.

Staking creates two separate taxable events over time. First, the reward is income when you receive it. Second, when you later sell that reward, any change in its price since you received it is a capital gain or loss. Many stakers forget the first event and get surprised at tax time.

Because staking-tax rules are unsettled at the edges and vary by country, this page focuses on the core US rule and the mechanics every staker should track. Keep detailed records of the date, amount, and dollar value of every reward you receive.

How it actually works

Staking taxes work in two stages: income tax when you receive the reward, then capital gains tax when you sell it. Understanding both stages is the key to staying compliant and avoiding a surprise bill. This is educational only and not tax advice.

Stage one is income. Under IRS Rev. Rul. 2023-14, the fair market value of a staking reward is ordinary income in the year you gain dominion and control over it. If you receive a reward worth $100 on the day it lands, you report $100 of income, taxed at your ordinary income rate.

That $100 also becomes your cost basis for the reward. Cost basis is the starting value you use to measure a later gain or loss. Recording it correctly at receipt is what prevents you from being taxed twice on the same value.

Stage two is capital gains. When you sell the reward, you compare the sale price to the cost basis. If you received it at $100 and sell at $150, you have a $50 capital gain. If you sell at $70, you have a $30 capital loss.

The ruling applies to both direct staking and staking through a centralized exchange like Coinbase or Kraken. Exchanges may issue tax forms, but the legal duty to report every reward as income at receipt is yours. Keep a dated log of each reward's amount and dollar value.

Start here

1Record every staking reward as you receive it: the date, the amount of coins, and the US dollar fair market value on that date.
2Report that dollar value as ordinary income for the tax year in which you gained dominion and control over the reward, per IRS Rev. Rul. 2023-14.
3Save the received value as your cost basis for each reward — you will need it to calculate gain or loss when you sell.
4When you sell a reward, subtract the cost basis from the sale price to find your capital gain or loss.
5Track holding period: rewards sold more than a year after receipt may qualify for lower long-term capital gains rates.
6Reconcile any exchange-issued tax forms against your own records, since the duty to report accurately is yours.
7Talk to a qualified tax professional, especially if you stake large amounts, stake through DeFi, or are outside the US.

Upsides

The rule is now clear in the US: staking rewards are ordinary income at fair market value when you gain dominion and control, per Rev. Rul. 2023-14.
The value you report as income becomes your cost basis, which prevents being taxed twice on the same amount when you later sell.
Detailed record-keeping at receipt makes the later capital gains calculation simple and defensible.
The ruling applies uniformly whether you stake directly or through an exchange, removing an earlier gray area.

Risks & watch-outs

You owe income tax on rewards when you receive them, even if you never sell and the price later crashes.
Tracking the fair market value of many small rewards across the year is tedious and easy to get wrong.
A single staking position can create dozens or hundreds of separate taxable receipts to record.
Rules differ by country and remain unsettled at the edges, so DeFi and cross-border staking can be genuinely complex.
Missing the income event at receipt is a common error that can lead to underreported income and penalties.

Common questions

Are crypto staking rewards taxable?

Yes, in the US crypto staking rewards are taxable as ordinary income at their fair market value when you gain dominion and control over them. This is the rule in IRS Revenue Ruling 2023-14, issued July 31, 2023. It applies whether you stake directly or through an exchange. This is educational only and not tax advice — consult a tax professional for your situation.

When exactly do I owe tax on staking rewards?

You owe income tax on a staking reward in the tax year you gain dominion and control over it, meaning the point you can sell or transfer it. For most stakers that is when the reward becomes available in their account. The taxable amount is the reward's US dollar fair market value on that date. You owe this even if you do not sell the reward.

Do I get taxed twice on staking rewards?

No, you are not taxed twice on the same value, but staking does create two separate taxable events. First, the reward is ordinary income at its value when received. That value becomes your cost basis. Second, when you sell, only the change in price since you received it is a capital gain or loss. Recording the received value correctly is what stops double taxation.

Does the IRS ruling apply to exchange staking like Coinbase?

Yes, IRS Rev. Rul. 2023-14 applies to both direct staking and staking through a centralized exchange such as Coinbase or Kraken. The exchange may send you a tax form, but the legal duty to report each reward as income at receipt is yours. Keep your own dated log of every reward's amount and dollar value to reconcile against any exchange forms.

What if I don't sell my staking rewards — do I still owe tax?

Yes, you still owe income tax on staking rewards even if you never sell them. The taxable event is receiving the reward and gaining control over it, not selling it. This is why staking can create a tax bill in a year when you took no cash out. Set aside a portion of rewards for taxes so a price drop does not leave you short.

How do I calculate cost basis on staking rewards?

Your cost basis for a staking reward is its US dollar fair market value on the date you received it and gained control over it. That is the same figure you reported as income. When you later sell, subtract this cost basis from the sale price to get your capital gain or loss. Accurate, dated records at receipt make this calculation straightforward.

Sources

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