Value captured by changing which blockchain transactions are included and how they are ordered within blocks.
For most investors MEV is a cost, not income: a sandwich attack raises the price you pay on a swap, which shows up as worse proceeds or higher basis on that trade. For validators and searchers who capture MEV, it is ordinary income when received.
To the party that captures it, yes, as ordinary income. To the trader who pays it through a worse price, it is reflected in the trade's proceeds or basis.
Source: Rev. Rul. 2023-14; IRS Notice 2014-21
Last reviewed September 18, 2026. Tax rules change; confirm current law before acting.
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