Tax reporting for staking rewards

What are staking rewards?

Staking is a process that allows rewards to be earned by holders of a specific coin. Staking derives from the PoS (Proof-of-stake) mechanism, used by a distributed blockchain network, where blockchain miners can mine or validate block transactions according to how many coins they have.

Is staking profitable?

Staking is almost as profitable as the mining or trading of cryptos, and it comes without risk. All you will need to do is to stake (buy and hold) some coins to get added to the mining pool. For the case of profits, the real gains you can get from staking are determined by how much you vest and for how long.

How are staking rewards taxed?

Interest income earned by staking a coin should be factored in as ordinary income once deposited or received. A cost basis is determined based on the deposit date which is then applied towards the sell price as and when those specific coins are sold