The US Internal Revenue Service has released updated guidance, Revenue Procedure 2026-20, which replaces the previous Revenue Procedure 2025-31. This update clarifies the conditions under which investment and grantor trusts can participate in staking on proof-of-stake networks without compromising their tax status.
Under the new rules, staking is classified as a property-conservation activity rather than active management. This distinction allows trusts to maintain their passive status and favorable tax treatment under IRC sections 671–677, provided they adhere to specific regulatory requirements.
To qualify for this safe harbor, trusts must meet 14 distinct criteria. These include listing interests on a national exchange, holding only a single type of digital asset, utilizing qualified custodians, and maintaining liquidity policies approved by the SEC.
The guidance introduces strict rules regarding the distribution of staking rewards. It applies to tax years ending on or after November 10, 2025. Trusts that previously complied with the earlier version are covered by a transition period.
Existing trusts were granted a nine-month window, ending around August 10, 2026, to amend their governing documents to align with these requirements. Entities that fail to meet all 14 conditions or missed the amendment deadline remain subject to classification risks.
