What counts as a taxable event when staking rewards convert to stablecoins?

[Andrew_M]

I’m trying to finalize my tax reporting and I’m stuck on how to properly account for the staking rewards I received across three different protocols last year. The cost basis at receipt seems straightforward, but I’m unsure if converting them immediately to a stablecoin creates a separate taxable event even before I’ve sold that stablecoin for fiat.

[Joseph_H]

I did something similar last year. I treated the staking rewards as ordinary income when I received them and used the FMV at receipt as my cost basis. When I swapped those rewards for a stablecoin right away, it felt like a separate disposition, and any price move since receipt showed up as a capital gain or loss when I eventually sold for fiat.

[Jason_L]

I'm not sure, but I think converting to stablecoin is a taxable event too, since you’re disposing of the reward token. The tricky part is whether the cost base stays the original FMV or resets to the stablecoin value, and how that carries forward.

[NatalieUW]

On my end, I kept a separate ledger for each protocol, logged the FMV on receipt, and treated the conversion to stablecoin as the sale of the reward token. When I later liquidated the stablecoin, I reported gains against that original basis.

[CamilaL]

Sometimes I wonder if the real issue is data quality from exchanges or the timing of price feeds more than the math; maybe the bigger problem is tracking which rewards came from which protocol.