IRS Clears Crypto Trusts to Stake Assets Without Losing Key Tax Status

The U.S. Internal Revenue Service has issued a safe harbor allowing certain investment and grantor trusts involved in staking proof-of-stake digital assets to do so without losing their federal tax status as trusts. Revenue Procedure 2026-20, issued Oct. 6, replaces Revenue Procedure 2025-31, from Nov. 2025.

The safe harbor covers trusts holding digital assets on permissionless proof-of-stake blockchains. Staking authorizations and other staking activities by a trust eligible for the safe harbor do not automatically result in disqualification of the trust as an investment trust under Section 301.7701-4(c) or a grantor trust. The safe harbor does not otherwise offer general tax advantages or benefits with respect to income from staking or other tax issues.

IRS Sets Strict Conditions for Crypto Trust Staking

Eligible vehicles include state law trusts that satisfy other investment and grantor trust requirements. Interests in the trust must be traded on a U.S. national securities exchange, and information disclosed about interests in the trust must comply with SEC rules. Other conditions of the national securities exchange must be satisfied to provide liquidity for interests in the trust.