In a novel crypto tax case out of the U.S. District Court for the Middle District of Tennessee, a taxpayer has challenged the IRS’s ability to treat staking rewards as ordinary income. The taxpayer asserts that staking rewards are the creation of new coins, and that this process is akin to a baker creating a new cake or an author creating a new novel. That is, the creation itself (the new coins) are not taxable income; it is the later sell or exchange that’s a taxable event. The taxpayer relies on old Supreme Court caselaw to show that the accession of wealth (that gives rise to taxable income) must be “clearly realized” to be treated as income. The taxpayer claims the created coins are not realized wealth until they are sold or exchanged. At its very basic, the new coins are simply “created”, and that creation cannot be taxable just because it is.