Overview
- The IRS issued Revenue Procedure 2026-20 to replace its 2025 guidance and to let eligible investment and grantor trusts stake proof‑of‑stake assets without losing their passive federal tax classification.
- Qualifying trusts must meet 14 specific conditions including listing interests on a national exchange, making SEC disclosures, holding only one type of digital asset, and using qualified custodians that control private keys.
- The procedure requires staking rewards to be additional units of the same asset and mandates proportional distributions to holders generally no later than 60 days after the quarter in which the trust gains control of the rewards.
- Reporting differs on how long existing trusts have to adopt the new rules, creating timing uncertainty for fund sponsors and trustees that should be resolved by consulting the text of Revenue Procedure 2026-20.
- Major exchange‑traded product sponsors are already adapting fund designs to include staking, which could change how shareholders receive rewards and will rely on coordination between tax rules and SEC liquidity and disclosure requirements.