Thanks @DawnC ! Wouldn't the reward always be in the form of additional tokens? Can you give an example of rewards in the form of increased of value?
Burn makes sense and if you burned crypto previously rewarded (and payout and burn can happen on the same day), do you still have to report payout and burn separately or should you report the net amount on the tax return?
For example, if you earned payout for 500 tokens, and burned 900 in total for the year, Do you
1. just report the capital loss of the net 400 (based on how much you brought it) or
2. you need to report ordinary income for these 500 at FMV when earned, then report a capital loss (likely short term) for the same 500 earned during the year (amount will be equal to the ordinary income reported for them) + a loss of 400 (based on how much you brought it initially).
I'm not sure as the payout and burn seems like similar types of transaction in this case and could happen during the same day but we are treating them very differently. Thanks again for the help.
