Question 1

How are crypto staking rewards taxed?

Accepted Answer

Generally, staking rewards are treated as ordinary income at their fair market value when received. This typically applies to all forms of staking including native Solana staking, liquid staking through protocols like Marinade, and validator rewards.

Question 2

What are the current IRS reporting requirements for crypto?

Accepted Answer

Currently, you must report all cryptocurrency transactions that result in taxable events, including sales, trades, and exchanges. You are responsible for accurately reporting all crypto gains and losses on your tax return.

Question 3

Are DeFi transactions taxable?

Accepted Answer

Yes, all DeFi transactions are taxable events. This includes token swaps, providing liquidity, yield farming, lending, borrowing, and claiming rewards.

Question 4

How do I calculate capital gains on NFT sales?

Accepted Answer

NFT capital gains are calculated like any other asset: sale price minus cost basis equals capital gain or loss. Your cost basis includes the purchase price plus any transaction fees.

Question 5

Are crypto airdrops taxable?

Accepted Answer

Generally, crypto airdrops are treated as ordinary income at their fair market value when received. The market value at receipt typically becomes your cost basis for future sales.

Question 6

Which cost basis method should I use for crypto?

Accepted Answer

The IRS allows several methods: FIFO (First In, First Out), LIFO (Last In, First Out), and Specific Identification. FIFO is the default method.

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