Many thanks Alex, will update all in the forum very shortly! 
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Hi All,
As a pre-cursor to progressing this project, Launchnodes undertook to seek professional advice from an international tax advisor and certified CPA in the US, to understand and clarify the tax benefits or otherwise of donating ETH staking rewards. One concern was that if it is more beneficial for donors to donate in fiat currency, donors may be discouraged from donating rewards from Impact Staking, and prefer to donate fiat currency directly. Another consideration was whether donating crypto earning from staking ETH would trigger a taxable event of any kind, or had negative implications for donors.
Launchnodes selected international tax specialists Troy Accounting LLC, who are also experienced with crypto and the tax implications of cryptocurrencies. We asked them for their professional opinion on a) what the tax benefits of making donations of āImpact Stakingā rewards would be, b) whether it would be more beneficial for a prospective donor to donate crypto directly to a good cause, or to donate in fiat currency.
In summary:
a) The tax benefits of donating crypto staking rewards are identical to donating crypto
b) There are benefits to donating crypto (staking rewards), rather than converting to fiat currency and donating the fiat currency
They have explained:
- Regardless of whether you buy or earn cryptocurrency through the staking/mining process, the tax benefits for donating cryptocurrency are the same
- Donors receive a tax deduction for the fair market value of the donated crypto
- There is no need for donors to pay capital gains tax on any appreciation of the donated crypto
The article from Troy Accounting also describes the record keeping and filings required for a typical US tax resident.
A requirement for these (US) tax benefits is that the donations are made to a 501(c)(3) registered non-profit in the US. Launchnodes will make it clear to Impact Stakers which projects are run by 501(c)(3) organizations, for those seeking to claim tax deductions. Other projects and causes (eg. non-US) will also be available to Impact Stakers, and Launchnodes has identified a mechanism that can be used in the future, for donations to be made to many of these entities globally, with exactly the same tax benefits as described above.
The full article from Troy Accounting LLC is available here: https://www.launchnodes.com/wp-content/uploads/2023/07/11thJuly2023-Impact-Staking-US-Treatment-of-Impact-Staking-Reward-Donations.pdf
All Impact Staking donations will be fully auditable and transparent on the Ethereum blockchain.
Tax treatment of charitable donations is generally favorable to donors in most jurisdictions, however Impact Stakers are advised to check with an accountant for their specific circumstances and tax residency.
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Sharing Launchnodesā wallet address for this project:
0x20d846b51B999cE4A567E2191fD912B6c7cDEA89
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Hey @Rajesh we started EasyTrack motion to get LEGO MS top up to disburse the grant afterwards.
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@Rajesh the initial grant for completing the first milestone is sent - Ethereum Transaction Hash (Txhash) Details | Etherscan, after the tax opinion reviewed vy LEGO council.
Looking forward to enabling Impact Staking opportunity for Lido stakers!
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@Alex_L Thank you! Weāre really excited to be progressing Impact Staking on Lido! Thanks to you, the LEGO council, the broader Lido team and community for all your support and feedback so far!
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Hi
I wanted to update you on progress of this proposal, since the grant funding in August.
We planned to have the smart contracts fully designed and developed by now, but due to the absence of a key Launchnodes team member, this work hasnāt progressed as quickly as we intended, and we are ~12 weeks behind schedule. We plan to accelerate development, in order to recover this time and deliver the project ahead of the schedule provided in the proposal that was approved.
Design work is underway, and designs for the User Interface and Workflows are also now progressing well. We have agreed to progress 4 workstreams in parallel over the next 3 months: Smart contract development, User Interface [staking], Lido Impact Staking Dashboard, Project/Metrics Dashboards.
We intend to provide a full update and demonstration of the workflows, User Interface and smart contract - in a test environment - week commencing 22nd January 2024. We have also been progressing partnerships with leading global charities, including GiveDirectly.
During November and December, we will share more in this forum and provide early views of the User Interface and workflows - your feedback and suggestions are very welcome as we develop this and plan for testing, security reviews/audits and launch in Q1 next year.
Please reach out if you have any feedback or suggestions on how we can make Lido Impact Staking the best it can be, weāre looking forward to sharing more soon and building your feedback into our launch plans.
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