The IRS has released Rev. Rul. 2019-24 to provide guidance on the tax treatment of receiving a cryptocurrency as a result of a hard fork and an airdrop. An owner of the existing cryptocurrency has no gross income if the new cryptocurrency has not been received as a result of a hard fork. However, gross income must be recognized if the new cryptocurrency has been received via airdrop. Click here to see examples. The IRS has also updated its Virtual Currency Transactions FAQs on its website here.
Cryptocurrency: Hard Fork and Airdrop
About the Author: Bikramjit Singh
Bik Singh is a Senior Accountant in our Novato office.