The courts do not determine when and how to tax staking rewards.
Bad news for a man who was asking a court to rule on the taxation of staking rewards. A court tosses his case.
He filed a refund claim alleging that token rewards he got from staking cryptocurrency are created property that is not taxed on receipt, but on disposition.
The IRS first disallowed his refund claim. But after he filed a lawsuit, the IRS sent him a refund check.
Last year, a trial court tossed the case without ruling on the merits. A federal appeals court has now affirmed the lower court’s decision. The man filed a refund suit, and IRS later paid him in full. That makes the case moot. It doesn’t matter that the taxpayer didn’t cash the refund check.
Jarrett, 6th Cir.