What the notice says

IRS Notice 2014-21, 2014-16 I.R.B. 938 (Apr. 14, 2014), established three foundational rules that govern the U.S. federal income tax treatment of digital assets including ETH:

Virtual currency is property, not currency. General tax principles applicable to property transactions apply to transactions using virtual currency. This means that receiving digital assets as income — whether as compensation, payment for services, or staking rewards — triggers income recognition, not currency conversion.

FMV at time of receipt. A taxpayer who receives virtual currency as income must include the fair market value of that virtual currency, measured in U.S. dollars as of the date of receipt, in gross income. Q&A-5 of the notice provides that FMV is determined by converting at the exchange rate established by market supply and demand, if the virtual currency is listed on an exchange.

Consistent application. The notice requires that the FMV methodology be applied in a "reasonable manner that is consistently applied." This consistency requirement means a taxpayer cannot switch pricing sources opportunistically from year to year.

Rev. Rul. 2023-14 (2023) applies the same FMV-at-receipt standard specifically to proof-of-stake staking rewards, directing that FMV for staking rewards is determined as of the date and time the taxpayer gains dominion and control, using the Notice 2014-21 methodology.

How TrueStake applies it

TrueStake determines FMV for ETH staking rewards using the UTC daily close price on the recognition date. This is the "reasonable manner consistently applied" operationalization of the Notice 2014-21 standard.

Price data comes from two sources: Kraken (primary) and CoinGecko (corroborating). Both are major exchanges with market-supply-and-demand-established ETH/USD rates, satisfying Notice 2014-21 Q&A-5's exchange-rate requirement.

TrueStake's two-source corroboration policy means that if Kraken and CoinGecko disagree beyond a configured tolerance, the system flags the affected event for review rather than silently selecting one price. If neither source has a price for the required date, the event is also flagged. No income figure is produced silently on a pricing failure.

The raw API response from each price source is stored alongside every reward event. An auditor or examiner can trace each income dollar back to the specific on-chain event and the specific price observation used — the complete citation chain is preserved.

Not tax advice. Consult a qualified tax professional regarding your specific circumstances.