I bought SOL with a cost basis of 200 two years ago. It’s sitting in Solflare. If I stake it, it becomes a taxable event. I’m down 70%. So would those losses carry over $3,000 per year until gone? I haven’t made any trades this year so I don’t have any profits to deduct the loss from.

  • fairysquirtBEnglish
    1·
    1 year ago

    Staking isn’t a taxable event, the rewards are though. Pretty sure they are income tax. Staking sol isn’t disposal.

  • detenBEnglish
    1·
    1 year ago

    Depending what state you live in it can be different but the general idea is this:

    Staking your Sol is not a taxable event, and does not generate taxes on the base amounts.

    The rewards for staking are treated as income (not capital gains) and taxed at income tax rate. So if you receive a reward, whatever the reward is in USD will then need to be taxed when you do your taxes. If later you sell that SOL, the amount it was worth when you go the reward is considered your cost basis, and gains/losses are calculated off that. If you sell for a profit you pay short or long term capital gains.