IRS Clarifies Tax Treatment Of Crypto Hard Forks, Airdrops

Law360 (October 9, 2019, 11:40 AM EDT) -- The splitting of a cryptocurrency blockchain under a "hard fork" does not create taxable income if no new cryptocurrency is received, but taxable income is generated by "airdrops" that deliver new cryptocurrency, the IRS said in guidance released Wednesday.

“The IRS is committed to helping taxpayers understand their tax obligations in this emerging area,” said IRS Commissioner Chuck Rettig. (Getty) The guidance came in the form of a revenue procedure and set of frequently asked questions addressing how virtual currency holders must report cryptocurrency transactions to the Internal Revenue Service and the calculation of gains and losses and tax basis in...

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