US Lawmakers Introduce New Bill For Clarification on Taxation of Staking Rewards

cryptonews.com:

Two bipartisan U.S. lawmakers, Representatives Drew Ferguson and Wiley Nickel, have proposed the Providing Tax Clarity for Digital Assets Act to address taxation issues related to block rewards earned by crypto miners. 

The bill aims to clarify the tax treatment of staking rewards, proposing that they should only be taxed at the time of their sale rather than upon acquisition.  This move seeks to prevent double taxation and provide much-needed clarity for investors and businesses in the digital asset industry.

Representative Ferguson emphasized the complexity of the current tax treatment of digital asset rewards, highlighting the confusion it causes among investors and the potential for American businesses to relocate overseas due to regulatory uncertainty.

“The United States has long been the leader in innovation and technology yet is falling behind our foreign counterparts in providing tax clarity for the emerging digital asset industry. The United States’ treatment of digital asset rewards is overly complex – leading to confusion by investors, double taxation, and American businesses relocating overseas,” said Ferguson.

The proposed legislation aims to establish clear tax guidelines for block rewards from proof-of-work and proof-of-stake networks, aligning taxation with the sale or spending of these rewards rather than their acquisition.

I’m proud to introduce the Providing Tax Clarity for Digital Assets Act with @RepDrewFerguson to ensure clear guidance on the taxation of digital assets.

This is a critical step that will spur innovation, strengthen investor confidence & discourage business from moving overseas. https://t.co/rDpvvEhIBI

— Rep. Wiley Nickel (@RepWileyNickel) April 30, 2024

The move comes in response