New IRS guidance says Bitcoin forks and airdrops are taxable events
Three letters…so much cringe every time I see them…
“The IRS has issued official guidance to help taxpayers understand their cryptocurrency obligations relating to hard fork and airdrop events.
The guidance defines cryptocurrency as ‘a type of virtual currency that utilizes cryptography to secure transactions that are digitally recorded on a distributed ledger,’ and comes in the form of an FAQ and an associated Revenue Ruling.
The documents provide some guidance on tax obligations for hard forks and airdrops and advise taxpayers on how to determine cost basis and fair market value.
Though the guidance does include some positive news — crypto asset transfers are not considered tax events, and gifts of cryptocurrency are not subject to taxes — several commentators have questioned the guidance with concerns it could lead to unforeseen consequences.”