Solana Policy Institute CEO urges deferring tax on staking, mining rewards until sale

Kristin Smith, CEO of the Solana Policy Institute, has urged for the passage of a U.S. bill (H.R. 9175) that would defer taxation on cryptocurrency mining and staking rewards until they are sold. Writing on X, she stated that after the Genius Act and the Clarity Act, tax clarity is now needed. Smith argued that under the current system, rewards from mining or staking can be taxed immediately upon receipt, but the proposed bill would allow the option to defer taxation until the point of sale. She contended that since the rewards are newly created tokens and not cash, taxing them before they are sold creates the burden of paying taxes without any realized income. Regarding an amendment by Representative Steven Horsford that would limit the tax deferral period to five years, Smith described it as a provision that would force taxation regardless of whether the assets are actually sold. She added that the Joint Committee on Taxation (JCT) also assessed that the five-year cap would have a negligible effect on tax revenue while creating a substantial burden for taxpayers and the Internal Revenue Service (IRS).