I bought SOL with a cost basis of 200 two years ago. It’s sitting in Solflare. If I stake it, it becomes a taxable event. I’m down 70%. So would those losses carry over $3,000 per year until gone? I haven’t made any trades this year so I don’t have any profits to deduct the loss from.
Staking crypto is like money parked in a savings account that accrue interests so yeah technically you have to report it to IRS even if it’s less than $10 you earned that year.