The U.S. Internal Revenue Service on Oct. 6 released Revenue Procedure 2026-20, replacing Revenue Procedure 2025-31 issued in November 2025. The updated guidance says qualifying investment trusts and grantor trusts may take part in proof-of-stake staking while keeping their favorable tax treatment. The IRS said compliant staking will be treated as a "property preservation activity," allowing those 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. The safe harbor sets out 14 requirements, including that trust shares be listed on a national exchange, the trust hold only a single digital asset, custody be handled by a qualified custodian, the liquidity policy receive SEC approval, and staking rewards not be stockpiled. The guidance applies to taxable years ending on or after Nov. 10, 2025.
The U.S. Internal Revenue Service released Revenue Procedure 2026-20 on Oct. 6, updating and replacing Revenue Procedure 2025-31, which was issued in November 2025. The new guidance says qualifying investment trusts and grantor trusts may participate in proof-of-stake staking without losing favorable tax treatment.
Under the update, the IRS treats compliant staking as a "property preservation activity." That keeps the trusts on the passive side and allows them to retain investment trust and grantor trust status under Internal Revenue Code Sections 671 through 677.
The safe harbor includes 14 requirements. They include listing trust shares on a national exchange, holding only a single digital asset, using a qualified custodian, obtaining SEC approval for the liquidity policy, and not stockpiling staking rewards.
The guidance applies to taxable years ending on or after Nov. 10, 2025.
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