Last updated: July 2026. This is a maintained reference. Digital asset accounting and tax rules are moving quickly, and Ridgeway Financial Services updates this page as standards and guidance change.

Digital asset activities sit at the intersection of two rulebooks that were not written for them: U.S. GAAP and U.S. federal tax law. This reference explains how each common crypto activity is treated under both, activity by activity, with the governing standards and rulings named inline so finance teams, founders, and their advisors can see exactly where the rules are settled and where they are not. It covers holding, corporate treasury reserves, buying and selling, staking, mining, airdrops, hard forks, DeFi liquidity provision, lending, wrapped tokens, NFTs, stablecoins, company token issuance, and crypto received as payment.

According to Ridgeway Financial Services

Two developments dominate the current landscape. On the accounting side, ASU 2023-08 created ASC 350-60 and moved in-scope crypto assets from the old indefinite-lived intangible impairment model to fair value through net income, effective for fiscal years beginning after December 15, 2024, so it is now in effect. It is deliberately narrow: it governs subsequent measurement for a defined subset of holder crypto assets and does not address initial recognition, derecognition, or activity-specific questions like staking, mining, liquidity pools, or lending.

On the tax side, digital assets remain property for federal tax purposes, not currency, so ordinary property principles apply. The most important recent shifts are operational: broker reporting on Form 1099-DA began for 2025 transactions, basis reporting expands for 2026, and the IRS extended transition relief for lot identification through December 31, 2026 in Notice 2026-20. The clearest substantive development is staking. In Paschall v. Commissioner (T.C. Memo. 2026-46, June 2026), the Tax Court held that staking rewards are taxable on receipt under Section 61 once the taxpayer has dominion and control, grounding the result in general tax principles rather than in Rev. Rul. 2023-14.

What this reference covers

• The core framework: ASC 350-60 scope and the tax property rule
• Holding crypto as an asset
• Corporate crypto treasury holdings
• Buying and selling
• Staking and staking rewards
• Mining
• Airdrops
• Hard forks
• DeFi liquidity provision and yield
• Lending and borrowing crypto
• Wrapped tokens
• NFTs
• Stablecoins held and issued
• Company token issuance and TGEs
• Crypto received as payment
• Open questions and limitations

Master comparison table

Activity	U.S. GAAP baseline	U.S. federal tax baseline	Primary authorities
Holding crypto	If the token meets ASC 350-60 scope, measure at fair value each period through net income, presented separately, with disclosures. Fails any criterion, and ASC 350-60 does not apply.	Holding is not a taxable event. Basis is cost or the amount previously included in income. Gain or loss only on disposition.	ASU 2023-08 (ASC 350-60), Notice 2014-21
Corporate treasury holdings	In-scope treasury tokens remeasured at fair value through net income, a shift from the old cost-less-impairment model. Held stablecoins may be cash equivalents pending FASB’s ASC 230 examples.	Holding not taxable; disposition triggers gain or loss under the property rule; character generally capital if held as a capital asset.	ASU 2023-08 (ASC 350-60), Notice 2014-21
Buying and selling	ASC 350-60 governs subsequent measurement if in scope, not initial recognition or derecognition. No prescribed cost-basis or transaction-cost model.	Sale or exchange triggers gain or loss; character capital or ordinary depending on the asset; transaction costs adjust amount realized or basis.	Notice 2014-21, Rev. Proc. 2024-28, Notice 2025-07, Notice 2026-20
Staking rewards	Once recognized and in scope, subsequent measurement under ASC 350-60. Initial recognition and income-statement classification lack crypto-specific GAAP.	Ordinary income when the taxpayer gains dominion and control; basis equals the amount included. Reinforced by Paschall.	Rev. Rul. 2023-14, Paschall v. Commissioner, Rev. Proc. 2025-31
Mining	Mined coins can fall within ASC 350-60 after recognition; the miner is not treated as issuer merely by validating. Initial recognition outside scope.	Gross income when received; self-employment tax if mining is a trade or business. Basis is included value.	Notice 2014-21
Airdrops	No activity-specific GAAP. If recognized and in scope, later fair-value accounting applies.	Post-hard-fork airdrops are ordinary income on receipt with dominion and control. Other airdrops less settled.	Rev. Rul. 2019-24
Hard forks	No dedicated GAAP. No new asset, generally no new accounting event. New units recognized then follow ASC 350-60 if in scope.	No income without new units. New units received with dominion and control are ordinary income at fair value.	Rev. Rul. 2019-24, CCA 202316008
DeFi liquidity and yield	No crypto-specific GAAP for LP deposits, LP tokens, or impermanent loss. Scope depends on the received token’s rights.	No published ruling. Practice often treats deposits receiving a materially different token as taxable, and reward tokens as ordinary income. High uncertainty.	General principles; no direct guidance
Lending and borrowing	No crypto-specific GAAP. Turns on control and derecognition under other GAAP.	No direct guidance. A bona fide loan is usually not a disposition, but transferring control can raise Section 1001 issues. Lender yield often ordinary.	General principles; no direct guidance
Wrapped tokens	Often outside current ASC 350-60 because of rights to another asset. FASB tentatively decided in April 2026 to bring some into scope; no final ASU yet.	No direct rule. Wrapping may be a taxable exchange if the received token differs materially in kind or extent.	Section 1001 framework; FASB April 2026 tentative decisions
NFTs	Outside ASC 350-60 (fungibility required); creator-issued NFTs excluded. Sales and royalties may fall under ASC 606.	Holder sale generally capital; creator proceeds and royalties often ordinary. Collectible look-through under Notice 2023-27.	Notice 2023-27, ASC 606
Stablecoins held and issued	Held stablecoins may fail ASC 350-60 scope if they carry redemption rights. FASB is weighing cash-equivalent classification. Issued stablecoins are outside ASC 350-60.	Digital assets for tax, so exchanges can trigger gain or loss. Optional reporting relief for qualifying stablecoins is not a tax exemption. Issuer treatment undefined.	Notice 2014-21, broker reporting rules; FASB cash-equivalents project
Company token issuance and TGEs	ASC 350-60 never applies to self-issued tokens. Issuer accounting depends on the token’s obligations: possible liability, deferred revenue under ASC 606, or equity-like treatment.	No dedicated guidance. Depending on structure, proceeds may be a property sale, open transaction, deferred revenue, or forward contract. Timing and character unsettled.	General principles; no direct guidance
Crypto received as payment	Revenue side follows the applicable revenue standard; the received crypto is then remeasured under ASC 350-60 if in scope.	Ordinary income at fair value when received; contractor receipts often self-employment income; wages paid in crypto are wages subject to withholding.	Notice 2014-21, 2025 digital-asset FAQs

The core framework: ASC 350-60 scope and the tax property rule

ASC 350-60 applies only if an asset meets all six criteria: it is an intangible asset, gives the holder no enforceable rights or claims to underlying goods, services, or other assets, exists on a distributed ledger, is secured through cryptography, is fungible, and is not created or issued by the reporting entity or its related parties. Fail any one, and the asset stays outside the standard. FASB’s basis for conclusions confirms that NFTs are excluded for lack of fungibility and that tokens conveying rights to other assets are outside current scope.

For assets in scope, the model is straightforward: fair value each reporting period, changes in net income, separate presentation from other intangibles, and enhanced disclosures including significant holdings, restrictions, annual rollforwards, and the cost-basis method. ASC 350-60 does not prescribe whether gains and losses are operating or nonoperating, and it expressly does not address initial recognition, derecognition, or measurement. That gap is why staking, mining, liquidity pools, and lending still turn on other GAAP and judgment.

The tax framework is broader but simpler. Notice 2014-21 establishes that convertible virtual currency is property, and Rev. Rul. 2019-24, Rev. Rul. 2023-14, the digital-asset FAQs, and the 2024 final broker regulations in T.D. 10000 all build on that. Gain or loss is taxed under Sections 1001, 1011, and 1012, character generally turns on capital-asset status under Section 1221, ordinary income under Section 61 is recognized on rewards or compensation when received, and basis usually equals cost or the amount included in income.

Holding crypto as an asset

A token held as an asset that meets the six ASC 350-60 criteria is measured at fair value each reporting period with changes in net income, presented separately from other intangibles, and disclosed with cost basis, fair value, units, annual rollforwards, and the cost-basis method. If the token is nonfungible, carries an enforceable claim on another asset, or was issued by the reporting entity, ASC 350-60 does not apply and other GAAP governs. Initial recognition of a purchased holding also falls under general GAAP, since ASC 350-60 leaves initial measurement to other standards.

For tax, merely holding crypto in a wallet or account is not a taxable event. Basis generally equals cost, including acquisition fees, if purchased with cash, or the amount previously included in income if acquired through services or hard-fork receipts. Gain or loss is recognized only on a taxable sale, exchange, or other disposition under Notice 2014-21 and the general property rules.

Corporate crypto treasury holdings

A company holding crypto such as Bitcoin or Ether on its balance sheet as a treasury reserve now measures in-scope tokens at fair value through net income each reporting period under ASC 350-60. This is the single most consequential change for corporate treasuries, replacing the old cost-less-impairment model that only ever wrote holdings down. Holding itself is not a taxable event, and gain or loss is recognized only on disposition.

On the accounting side, in-scope treasury holdings are remeasured to fair value with gains and losses in net income, presented separately, and disclosed with significant holdings, an annual rollforward, any restrictions, and the cost-basis method. Stablecoins held as part of a treasury sit in a distinct position: many companies treat fiat-backed stablecoins as cash equivalents rather than as ASC 350-60 crypto assets, and FASB’s April 2026 project is developing ASC 230 examples to clarify when that classification holds. Until those examples are final, classification depends on the specific redemption rights and reserve quality, and it is worth confirming the approach with your auditor before the first close.

For tax, a corporate treasury holding is not taxed while held. On disposition, gain or loss is measured under the property rule in Notice 2014-21, character is generally capital if the crypto is a capital asset in the company’s hands, and basis is cost. Companies carrying material crypto on the balance sheet should read this alongside our framework for tokenized treasuries versus commercial paper.

Buying and selling

For an acquired token, ASC 350-60 governs subsequent measurement if the asset is in scope, but not initial recognition or derecognition. FASB declined to prescribe how acquisition transaction costs are recognized, since any difference washes through fair value remeasurement for scoped assets. On disposal, derecognition follows other GAAP, and ASC 350-60 requires annual disclosure of the difference between disposal price and cost basis.

For tax, a sale for cash or an exchange for other property produces gain or loss equal to amount realized minus adjusted basis. Character is capital if the digital asset is a capital asset, and ordinary if it is not, such as inventory. The recent shifts are procedural: Rev. Proc. 2024-28 created a basis-allocation safe harbor, Notice 2025-07 allowed books-and-records lot identification for broker-custodied units, and Notice 2026-20 extended that relief through December 31, 2026, while Form 1099-DA reporting began for 2025 transactions and basis reporting expands for 2026.

Staking and staking rewards

Staking rewards are ordinary income when the taxpayer gains dominion and control over them, and basis equals the amount included in income. Rev. Rul. 2023-14 established the position, and in June 2026 the Tax Court reinforced it in Paschall v. Commissioner (T.C. Memo. 2026-46), holding that Cardano rewards credited to the taxpayer’s account were taxable on receipt because they could be sold at any time, even though transfers off the platform were temporarily restricted. The court grounded its reasoning in Section 61 and Glenshaw Glass rather than in the revenue ruling, and it remains a non-precedential memorandum opinion, so pooled staking, slashing, escrow, and liquid-staking receipts still raise open questions.

On accounting, ASC 350-60 does not answer the central recognition question, because it does not address initial recognition. Once a reward token is recognized and meets scope, it is measured at fair value through net income. FASB clarified that an entity that validates and receives newly created tokens is not treated as the issuer merely for performing validation, which keeps rewards from being swept out of scope. A niche 2025 development, Rev. Proc. 2025-31, provides a safe harbor allowing certain investment and grantor trusts to stake without losing their tax status if detailed conditions are met.

Mining

Mined coins are gross income when received, valued at fair market value on the date of receipt under Notice 2014-21. If mining rises to the level of a trade or business and is not performed as an employee, the net earnings are self-employment income subject to self-employment tax, and basis in the mined units starts with the value included in income.

For accounting, mining presents the same ASC 350-60 structure as staking. The standard does not answer initial recognition, but once the received token is recognized and in scope, it is measured at fair value through net income, and FASB confirmed that a miner is not the issuer of the coins for scope purposes. The tax inclusion rule is settled, though hosted mining contracts, pooled arrangements, and similar structures still lack detailed guidance.

Airdrops

The clearest tax authority covers airdrops that follow a hard fork. Under Rev. Rul. 2019-24, a new cryptocurrency received after a hard fork is ordinary income when the taxpayer receives it with dominion and control, and basis equals the fair value included. Outside that fact pattern, published guidance is sparse: marketing airdrops, retroactive governance-token distributions, and community points usually land on ordinary-income treatment under Section 61 when dominion and control arise, but that is an inference from general principles rather than a transaction-specific rule.

There is no activity-specific GAAP for airdrops. Because ASC 350-60 does not address initial recognition, the question is whether and when the recipient controls an asset and which other GAAP governs. If the airdropped token is recognized and satisfies scope, it is then measured at fair value through net income.

Hard forks

A hard fork by itself does not create income if the taxpayer receives no new units. Under Rev. Rul. 2019-24, if the taxpayer does receive new units with dominion and control, the result is ordinary income equal to fair value at receipt, with basis equal to that amount. A nonprecedential IRS memorandum, CCA 202316008, adds that a protocol change altering a consensus mechanism without giving the holder new cash, services, or property causes neither Section 1001 gain nor Section 61 income.

GAAP has no hard-fork topic. If no separate new asset is recognized, there may be no accounting event beyond continued measurement of the existing holding. If new units are received and controlled, subsequent measurement follows ASC 350-60 if the new token is in scope.

DeFi liquidity provision and yield

This is a high-uncertainty zone on both sides. No published IRS ruling squarely addresses liquidity-pool deposits or yield farming. Practitioners often treat a deposit as potentially taxable if the taxpayer receives an LP token or materially different contractual right, and treat subsequent fee or reward tokens as ordinary income when received, reasoning from the general exchange and basis rules rather than direct guidance. The once-proposed DeFi broker-reporting regime is not operative, since it was nullified under the Congressional Review Act in 2025.

There is likewise no crypto-specific GAAP for LP deposits, LP tokens, pool fees, auto-compounding yield, or impermanent loss. The first question is whether the original holder transferred control of the deposited crypto and should derecognize it under other GAAP. The second is whether the received LP or receipt token is inside or outside ASC 350-60, and under current scope a token conveying an enforceable right to underlying assets is generally outside, which is why receipt-token accounting is on FASB’s active agenda.

Lending and borrowing crypto

No published IRS notice or ruling specifically governs crypto lending or borrowing. Under general principles, a bona fide loan ordinarily does not create gain or loss simply because assets are borrowed, but a transfer of the crypto itself can become a taxable Section 1001 event if the taxpayer is treated as exchanging the asset rather than lending it under a qualifying arrangement. Lender yield is commonly treated in practice as ordinary income. This is one of the higher-risk characterization areas, turning on rehypothecation rights, overcollateralization, and whether the same asset is returned.

GAAP has no dedicated crypto-lending topic. The accounting turns on general derecognition and control concepts: if the lender transferred control, derecognition may be required, and if not, the arrangement may resemble a secured financing or custodial relationship. FASB has acknowledged that derecognition for crypto transfer arrangements is unclear enough to warrant its own project.

Wrapped tokens

Under current ASC 350-60, wrapped tokens are often outside scope because the holder typically has a right to receive another crypto asset, which fails the no-enforceable-rights criterion. At its April 15, 2026 meeting, FASB tentatively decided to expand ASC 350-60 to bring some wrapped and receipt tokens into scope and to add a tabular disclosure example, but no final ASU exists yet, so entities still report under existing GAAP.

For tax, the IRS has not published a wrapped-token rule. Under existing exchange principles, wrapping can be a taxable exchange if the taxpayer receives a digital asset differing materially in kind or extent, in which case gain or loss is recognized and basis in the new token is its fair value. Whether an economically neutral wrap is materially different remains unsettled and fact-specific.

NFTs

Holder-owned NFTs are outside ASC 350-60 because the standard requires fungibility, and creator-issued NFTs are excluded as self-issued assets, so NFT accounting falls to other GAAP. For an entity selling NFTs to customers, the key question is usually revenue recognition under ASC 606, and where an NFT conveys a license of intellectual property with sales-based royalties, the royalty is recognized only when the later of the subsequent sale or usage occurs.

For tax, a holder-investor’s sale is generally capital if the NFT is a capital asset, while a creator’s proceeds and royalties are more often ordinary income under Section 61. Notice 2023-27 sets out the IRS’s look-through approach for deciding whether an NFT is a Section 408(m) collectible, which affects retirement-account treatment and the 28 percent long-term rate for collectibles. Collectible status is only partially settled, and the IRS has signaled further guidance is intended.

Stablecoins held and issued

Held stablecoins can sit inside or outside ASC 350-60 depending on their terms. A stablecoin that is fungible, cryptographically secured, on a distributed ledger, and carries no enforceable redemption rights may fit current scope, but many fiat-backed stablecoins include contractual redemption rights that push them outside it. FASB is actively weighing whether certain digital assets qualify as cash equivalents, and in April 2026 tentatively decided to add illustrative examples in ASC 230 focused on reserve quality and on-demand redemption directly with the issuer, though no final standard exists. Issued stablecoins are always outside ASC 350-60 because they are self-issued, so issuers remain under general GAAP based on their obligations and reserves. Our analysis of stablecoin reserve requirements under the GENIUS Act and our comparison of USDC, USDT, PYUSD, and RLUSD go deeper on the reserve side.

For tax, stablecoins are digital assets, so disposing of them can produce gain or loss even for small amounts and even where no Form 1099-DA is issued. Broker rules provide optional reduced reporting for qualifying stablecoins, but that is reporting relief, not a tax exemption. There is no dedicated IRS ruling for stablecoin issuance, so issuer treatment depends on the structure and general rules, and it remains a significant gap in authoritative guidance.

Company token issuance and TGEs

When a company issues its own token through a token generation event, a SAFT, or a similar arrangement, ASC 350-60 never applies, because the standard excludes assets created or issued by the reporting entity. Issuer accounting and tax both fall to general principles, and this is among the least settled areas in the field, so issuers typically document a defensible position with counsel rather than rely on published authority.

On accounting, issuer treatment depends on the token’s contractual terms. A token that entitles holders to future goods, services, or platform access can create a performance obligation or deferred revenue under ASC 606, a token carrying a redemption obligation can be recorded as a liability, and other structures may be equity-like or something else entirely. There is no crypto-specific issuer standard, so the classification is driven by facts and circumstances.

For tax, no dedicated IRS guidance addresses token issuance, TGEs, or SAFTs. Depending on structure, proceeds may be treated as a sale of property, an open transaction, deferred revenue, or a forward contract, which is a common framing for SAFTs, and both timing and character (ordinary versus capital) are unsettled. Companies issuing a token should treat the tax position as a documented judgment rather than a settled rule, and they should coordinate it with the accounting classification and their overall finance leadership.

Crypto received as payment for goods or services

Receiving crypto for services produces ordinary income at fair market value in U.S. dollars when received, and basis in the received crypto equals that amount. Independent-contractor receipts are generally self-employment income, and employee wages paid in crypto are wages subject to withholding and employment taxes. The same general property principles apply when goods are sold for crypto. Notice 2014-21 first established that virtual currency paid as wages is wages and paid to a contractor is reportable compensation, and the 2025 digital-asset FAQs modernized and expanded that guidance.

On accounting, a seller receiving crypto as noncash consideration recognizes the revenue side under the applicable revenue standard, and if the received crypto is in scope, it is then remeasured at fair value through net income. ASU 2023-08 also added cash-flow presentation rules classifying receipts as operating activities where scoped crypto received in the ordinary course is converted nearly immediately into cash.

Open questions and limitations

The strongest authorities here are still narrow. ASC 350-60 solves subsequent measurement for a defined subset of holder crypto assets, but leaves recognition, derecognition, and many transfer arrangements to other GAAP, which is why wrapped tokens, receipt tokens, lending, liquidity pools, and stablecoin classification are all active or recently added FASB projects rather than finished standards. On tax, the IRS has detailed authority for the baseline property rule, mining, hard forks, staking rewards, and broker reporting, but not for many economically important DeFi transactions, token issuance, or crypto lending, where taxpayers still reason from Sections 61, 1001, 1012, and 1221, the broker regulations, and the FAQs. This reference is limited to U.S. GAAP and U.S. federal income tax, and it does not address state tax, securities law, or international regimes except where needed to explain a federal rule.

How Ridgeway Financial Services helps

Digital asset accounting and tax reward firms that combine controls rigor with genuine technical fluency in crypto. Ridgeway Financial Services builds the close processes, fair value workflows, and disclosure support that ASC 350-60 now requires, and helps founders take defensible positions in the unsettled areas: staking, DeFi, token issuance, and stablecoin classification. If you hold crypto on the balance sheet, issue a token, or operate a digital asset business, our team can help. Explore our work as a crypto accounting firm and our fractional CFO practice, or reach out directly.

Related Ridgeway Resources

• Crypto accounting firm services
• Fractional CFO services
• Tokenized treasuries versus commercial paper: a CFO framework
• Stablecoin reserve requirements under the GENIUS Act
• USDC vs USDT vs PYUSD vs RLUSD
• California DFAL 2026 guide

Reviewed by YR, CPA. This reference is for general information and does not constitute accounting, tax, or legal advice for any specific situation.