The U.S. Internal Revenue Service released Revenue Procedure 2026-20 on Oct. 6, replacing Revenue Procedure 2025-31 issued in November 2025. The new guidance says qualifying investment trusts and grantor trusts may take part in proof-of-stake staking while keeping their favorable tax treatment. IRS classifies compliant staking as a property preservation activity, allowing those trusts to remain on the passive side and preserve their status under Internal Revenue Code Sections 671 through 677. The safe harbor sets out 14 conditions, including exchange listing requirements, single-asset holdings, qualified custody, SEC-approved liquidity policies, and a ban on stockpiling staking rewards. The guidance applies to tax years ending on or after Nov. 10, 2025.
The U.S. Internal Revenue Service on Oct. 6 released Revenue Procedure 2026-20, updating and replacing Revenue Procedure 2025-31, which had been issued in November 2025. According to ChainCatcher, the new guidance says qualifying investment trusts and grantor trusts may participate in proof-of-stake staking while retaining favorable tax treatment.
IRS treats compliant staking as a property preservation activity
Under the guidance, the IRS treats compliant staking as a "property preservation activity," allowing the trusts to remain on the passive side and preserve their status as investment trusts and grantor trusts under Internal Revenue Code Sections 671 through 677.
Safe harbor includes 14 requirements
The safe harbor includes 14 requirements. They include listing shares on a national exchange, holding only a single digital asset, keeping assets with a qualified custodian, maintaining a liquidity policy approved by the U.S. Securities and Exchange Commission, and not stockpiling staking rewards.
Effective tax years
The guidance applies to tax years ending on or after Nov. 10, 2025.
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