Just wondering if anyone else has experienced this particularly nasty surprise from the IRS and Coinbase:
Long story short, Coinbase is reporting ALL staking income to the IRS, from way back when ETH staking went online in 2020. It's not just for 2023 or since April 2023, when you could first unlock and sell your ETH staking rewards.
Needless to say, that's going to be a hefty extra tax bill for those who staked since the start. Even worse, you get hit whether or not you sell your ETH rewards for US dollars. As I gather, Coinbase is basically using the ETH prices of April 2023 to decide the US dollar amount to report to the IRS (on form 1099-MISC).
This is the first time you need to pay tax in US dollars for staking rewards that were never sold and remain as ETH.
Can anyone confirm or disprove this? I hope I'm wrong, but somehow it doesn't seem so.
My understanding is that the amount you put into staking ETH on Coinbase is tax-free. The tax that will be collected will come from the rewards that will be obtained from the amount
you put in the stakes. Please correct me if I misunderstood. This is the taxable income from the IRS, right?
And my understanding is that Coinbase does not directly deduct the tax from our staking earnings; instead, we ourselves will report it in the tax return that is called.
Reference :
https://www.coinbase.com/learn/your-crypto/understanding-crypto-incomehttps://gordonlaw.com/cryptocurrency-tax-lawyer/