The IRS’s Revenue Procedure 2026-20 allows certain qualifying trusts to stake digital assets without losing their federal income-tax classification as investment trusts and grantor trusts—but only if they meet every condition in the procedure. It is a limited safe harbor, not a general tax approval of staking or a ruling on every tax consequence for a trust or its holders. The procedure is effective for tax years ending on or after October 6, 2026, and supersedes Revenue Procedure 2025-31.
Which trusts may use the safe harbor?
The rule is for a state-law trust that qualifies as an investment trust under Treasury Regulation § 301.7701-4(c) and as a grantor trust for federal income-tax purposes immediately before it satisfies the procedure’s requirements. The procedure’s protection concerns whether the trustee’s authorization of staking, and the staking itself, prevents the trust from retaining those classifications.
The IRS’s operative statement is that, if all requirements in section 6.02 are satisfied for a trust described in section 5, “the trustee’s authorization, pursuant to its trust agreement, to stake the trust’s digital assets and the resulting staking of the trust’s digital assets do not prevent the trust from qualifying for Federal income tax purposes as a trust classified as an investment trust under § 301.7701-4(c) and as a grantor trust.” This does not determine the tax treatment of every payment or transaction involving the trust or its holders.
What conditions must the trust meet?
The requirements are cumulative. The procedure’s sections 5 and 6 govern; the following checklist summarizes the principal conditions but is not a substitute for applying the operative text to a particular trust.
Do these 3 things before closing this tab:
1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitches#1 Best Overall
- Effortlessly build your crypto portfolio via the all in one Ledger Wallet app: buy, sell, send, receive, swap, stake and more across popular blockchains. 15,000+ coins & tokens in a single dashboard. Keep a close eye on the market. Compare service providers. Track performance. Get timely alerts. Build your portfolio with confidence.
- Effortlessly build your crypto portfolio via the all in one Ledger Wallet app: buy, sell, send, receive, swap, stake and more across popular blockchains. 15,000+ coins & tokens in a single dashboard. Keep a close eye on the market. Compare service providers. Track performance. Get timely alerts. Build your portfolio with confidence.
- Enjoy Bluetooth connectivity, iOS access, and hours of battery use with this mobile-first, secure backup signer. Freedom you can depend on.
- Genuine Check: confirm your signer is authentic during setup with the Ledger Wallet app.
- Protect your signer: keep it in mint condition at all times with a bespoke Pod or Case to avoid scratches and everyday wear and tear.
Exchange listing, disclosure, and liquidity policies
- The trust’s interests must trade on a national securities exchange, and the trust must comply with applicable exchange rules.
- Staking disclosure must be included in an effective SEC registration statement and remain subject to SEC oversight. The procedure refers to the SEC Division of Corporation Finance’s May 29, 2025 statement on certain protocol staking activities.
- The trust must maintain required written liquidity risk policies and procedures.
Assets, network, and custody
- The trust may hold only cash and units of one type of digital asset. Transactions must take place on a permissionless proof-of-stake network.
- One or more custodians must hold the assets at addresses they control. For assets it holds, only the relevant custodian may access the private keys.
- The trust must retain federal tax ownership of the assets while they are staked.
Purpose, providers, and control
- Staking must serve to protect and conserve trust property by mitigating majority-control risk. The trust’s permitted activities are limited to those enumerated in the procedure; it may not seek to exploit market variations to improve holders’ investments.
- The trust and sponsor must be unrelated to the staking provider. The procedure requires due diligence and arm’s-length contracts and reward allocation, and the provider must bear its own expenses.
- The trust, sponsor, and custodian acting in its custodial capacity may not direct or control the provider, except to direct staking and unstaking as the procedure permits.
Unstaked assets, liquidity, slashing, and rewards
- Assets generally must be made available for staking, subject to permitted liquidity reserves, temporary operational holdings, specified protective or transition events, and a contingent liquidity arrangement.
- Indemnification must cover slashing attributable to matters reasonably within the provider’s control or ability to protect against.
- Net rewards must be allocated to holders in proportion to their interests. They may be distributed in kind, sold for cash and distributed, or handled using a combination of those methods, within the procedure’s timing limit.
How do the 85% and 15% liquidity figures work?
These figures describe the exchange-liquidity framework discussed in the procedure; neither is a standalone tax-eligibility threshold. The IRS describes national securities exchange generic listing standards that require written liquidity risk policies when less than 85% of a trust’s assets are readily available each day to meet redemptions. For this purpose, an asset is not readily available if it is segregated, pledged, hypothecated, encumbered, or otherwise restricted from liquidation, sale, transfer, or assignment within one business day.
| Figure | What the procedure says it means |
|---|---|
| 85% | As described by the IRS in 2026, the daily readily available asset level below which the exchange framework requires written liquidity risk policies and procedures. |
| 15% | As described by the IRS in 2026, a proportion relevant to disclosure where more than 15% of assets are staked and are not readily available for redemption within one business day. |
The procedure’s disclosure discussion addresses the liquidity implications of assets that cannot be made available within one business day. The operative requirements also allow for a reserve and specify how the trust manages it, so the percentages should not be treated as a simple tax test for whether staking is allowed.
Rank #2
- Proven security at scale: Over 9 years and millions of cards issued with no known remote hacks, while military‑grade EAL6+ security keeps your private keys locked inside the chip. Your cryptocurrencies stay strongly protected from online attackers.
- Tap once to manage your entire crypto wallet across 90 blockchains - no USB cables or Bluetooth, no batteries, no setup. Access 14,100+ coins & tokens, DeFi, NFTs, and staking instantly from your phone
- Smart backup: Use your second Tangem Wallet as your Backup keys with end‑to‑end encryption; no more papers, pictures. If one card is lost, the remaining can still restore full access, with an optional seed phrase available for advanced users.
- Engineered to last up to 25 years: Waterproof (IP69K), shockproof and tested for extreme temperatures from −25°C to 50°C. A durable cold wallet with long‑term protection and independently audited security.
- Trusted by 6 million users worldwide (4.9 App Store, 4.8 Google Play) - buy, sell, swap, stake, and spend cryptocurrency directly. The secure offline storage wallet designed for how people actually use crypto wallets
How are staking rewards treated, and when must they be distributed?
The procedure applies its reward requirements whether rewards are newly minted units or transaction fees paid by parties seeking to add transactions to the blockchain, and whether the rewards themselves are staked or unstaked. Distribution must be made no more than 60 days after the calendar quarter in which the trust gains dominion and control over the rewards. If units are sold for distribution, the cash amount is determined when they are sold.
This timing language differs from Revenue Procedure 2025-31, which described periodic distribution “no less frequently than quarterly.” Revenue Procedure 2026-20 clarifies and modifies the rule; that change alone does not establish that all practices under the earlier procedure were noncompliant.
Rank #3
- Proven security at scale: Over 9 years and millions of cards issued with no known remote hacks, while military‑grade EAL6+ security keeps your private keys locked inside the chip. Your cryptocurrencies stay strongly protected from online attackers.
- Tap once to manage your entire crypto wallet across 90 blockchains - no USB cables or Bluetooth, no batteries, no setup. Access 14,100+ coins & tokens, DeFi, NFTs, and staking instantly from your phone
- Smart backup: Use your second Tangem Wallet as your Backup keys with end‑to‑end encryption; no more papers, pictures. If one card is lost, the remaining can still restore full access, with an optional seed phrase available for advanced users.
- Engineered to last up to 25 years: Waterproof (IP69K), shockproof and tested for extreme temperatures from −25°C to 50°C. A durable cold wallet with long‑term protection and independently audited security.
- Trusted by 6 million users worldwide - buy, sell, swap, stake, and spend cryptocurrency directly. The secure offline storage wallet designed for how people actually use crypto wallets
What changed from Revenue Procedure 2025-31?
Revenue Procedure 2026-20 responds to requests for clarity and supersedes the earlier procedure. The main operational changes identified in its requirements include:
| Topic | Earlier procedure | 2026 procedure |
|---|---|---|
| Implementation period | Nine-month amendment period that began November 10, 2025. | Six months after October 6, 2026, for implementation, including trust-agreement amendments or process changes. The earlier safe harbor may be relied on as clarified or modified during this period; reliance on it ends after the six months. |
| Custodians | Earlier wording did not expressly contemplate multiple custodians. | Multiple custodians are expressly contemplated. |
| Providers and contracting | Less detailed provider conditions. | More detailed independence, due-diligence, arm’s-length contracting, and reward-allocation conditions. |
| Temporary unstaked holdings | Earlier treatment was narrower. | Additional specified protective and operational events are covered. |
| Contingent liquidity | Earlier treatment was less specific. | May include specified cash facilities or current or deferred digital-asset sales or purchases, but not an arrangement the trust treats as borrowing digital assets. |
| Slashing protection | Earlier formulation was less specific. | Indemnification is framed around events reasonably within the provider’s control or ability to protect against. |
| Reward timing | Rewards were to be distributed periodically, no less frequently than quarterly. | Distribution is due no more than 60 days after the quarter in which the trust gains dominion and control. |
The six-month transition is the procedure’s implementation window; it is not a permanent extension of Revenue Procedure 2025-31.
Rank #4
- EAL5+ CERTIFIED SECURE ELEMENT + FINGERPRINT PROTECTION — Your private keys stay encrypted offline on a certified EAL5+ chip, the same security tier used in EMV bank cards. Built by DCENT, securing crypto since 2018. Fingerprint authentication adds a second layer no PIN-only wallet can match.
- 10,000+ ASSETS NATIVE ON 100+ BLOCKCHAINS — Hold Bitcoin, Ethereum, XRP, Solana, Cardano, popular stablecoins (USDT, USDC), and NFTs in one wallet. No third-party apps, no fragmented setup — every supported asset works straight out of the box.
- TAP-TO-SIGN MOBILE EXPERIENCE — Pair your wallet with the DCENT mobile app over Bluetooth. Manage tokens, review transactions, and access in-app swap features directly from your phone — no cables, no desktop required.
- WEB3 & dAPP ACCESS VIA METAMASK — Connect to MetaMask and other browser extension wallets to manage NFTs, claim airdrops, and access dApps. A large screen and intuitive 4-button interface keep every transaction clearly visible before you sign.
- SEAMLESS FIRMWARE UPDATES & 30-DAY MONEY-BACK GUARANTEE — Apply security updates without resetting your wallet or migrating funds. Backed by Amazon's 30-day money-back guarantee — your purchase is risk-free.
Which tax questions remain unresolved?
The safe harbor addresses only the consequences it expressly covers. The IRS says not to infer a result for conduct outside its scope or for other federal tax consequences. In particular, the procedure does not decide whether staking income is effectively connected with a U.S. trade or business or is unrelated business taxable income. It also does not determine the federal tax treatment of other digital-asset transactions, including forks and airdrops. Trust holders and individual stakers should not treat the trust-level classification rule as an answer to their own tax questions.
Quick Recap
Best Value
- Dual-chip architecture for maximum protection: The next-gen, fully auditable TROPIC01 chip works alongside a certified EAL6+ Secure Element—completely NDA-free—to deliver radically transparent, industry-leading defense against physical attacks.
- Quantum-ready security: Get protection against future threats with the first-ever hardware wallet designed with quantum-ready architecture.
- See every detail with confidence: Our largest high-resolution color touchscreen makes it easy to navigate your assets, review transactions and manage your coins with clarity.
- Wireless freedom with encrypted Bluetooth control: Manage, buy, swap and stake securely using Trezor Suite on desktop or mobile. Qi2-compatible wireless charging keeps your Trezor powered up. No cables required—security meets convenience.
- Works seamlessly with Android, iOS and desktop: Connect wirelessly or via USB-C to your phone or computer. Manage your crypto anywhere with our companion Trezor Suite app.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
Recommended Free Tools
