Staking through a protocol that provides a transferable token representing the staking position, allowing it to be used elsewhere.
Two questions, both unsettled: whether exchanging ETH for the liquid staking token is a disposal, and whether the accruing staking value is income as it accrues or gain when the token is sold. Rebasing tokens make the income view more natural; reward-bearing tokens make the gain view more natural. The position must be documented and consistent.
The rewards are generally treated as income when accessible, like regular staking. The added question is whether receiving the liquid token was itself an exchange, which the IRS has not addressed.
Source: No IRS guidance as of September 2026; IRS Notice 2014-21 (property treatment); Rev. Rul. 2023-14
Last reviewed September 18, 2026. Tax rules change; confirm current law before acting.
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