Right now I’m staking some ETH with Coinbase, but don’t want to lock all of it up there currently. My stack is not quite big enough to run a validator myself, but that’s my end goal. In the meantime, while I’m trying to accumulate more ETH, I’m thinking about running a mini node and then some with RocketPool.
However, here’s where my trepidation comes in. The swap of ETH to rETH (and back again) will be considered a taxable event. At this point it would be long term gains for me, so not too bad, but my cost basis is pretty damn low. It won’t be the worst, but it will still be a not insignificant tax bill.
Ultimately, I’ll have to crunch the numbers to see if RP staking will be right for me, but those taxable events are keeping me hesitant for now. And as ETH continues the upward trend, that event is getting even more and more expensive from an absolute value standpoint. What’re everyone else’s thoughts on this? I’m in the US, btw.
Edit: u/Fast_Contract pointed out that I was incorrect in part. rETH is needed for stakers, but not for node operators. However, node operators get rewarded in nETH, which still seems to me like it may be taxable when swapped for ETH, in addition to the reward income itself being taxable when it’s received.