IRS: Crypto rewards received before account freeze are taxable in the year of receipt
The Internal Revenue Service (IRS) of the United States released a memorandum in October addressing the tax obligations of digital asset rewards held in frozen accounts due to bankruptcy. The guidance was sent to Michael R. Fiore of the IRS Small Business/Self-Employed Division and examines a hypothetical taxpayer (referred to as "Taxpayer A") who holds cryptocurrency in a bankruptcy platform account and received rewards such as staking bonuses before the account was frozen.
According to IRS regulations:
Taxpayer A received the reward in the first year before the account was frozen and must include the fair market value of the date and time of receipt of the reward in the total income of the first year...even if the account remains frozen on December 31 of the first year.
This explanation follows provisions in Section 61 and Section 451 of the Internal Revenue Code, which require income to be recognized in the year received, regardless of whether it is later unobtainable.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
New spot margin trading pair — HOLO/USDT!
FUN drops by 32.34% within 24 hours as it faces a steep short-term downturn
- FUN plunged 32.34% in 24 hours to $0.008938, marking a 541.8% monthly loss amid prolonged bearish trends. - Technical breakdowns, elevated selling pressure, and forced liquidations highlight deteriorating market sentiment and risk-off behavior. - Analysts identify key support below $0.0080 as critical, with bearish momentum confirmed by RSI (<30) and MACD indicators. - A trend-following backtest strategy proposes short positions based on technical signals to capitalize on extended downward trajectories.

OPEN has dropped by 189.51% within 24 hours during a significant market pullback
- OPEN's price plummeted 189.51% in 24 hours to $0.8907, marking its largest intraday decline in history. - The token fell 3793.63% over 7 days, matching identical monthly and yearly declines, signaling severe bearish momentum. - Technical analysts cite broken support levels and lack of bullish catalysts as key drivers of the sustained sell-off. - Absence of stabilizing volume or reversal patterns leaves the market vulnerable to further downward pressure.

New spot margin trading pair — LINEA/USDT!
Trending news
MoreCrypto prices
More








