US IRS Releases Guidance on Crypto Airdrops and Hard Forks

US IRS Releases Guidance on Crypto Airdrops and Hard Forks



US IRS Releases Guidance on Crypto Airdrops and Hard Forks

The US Internal Revenue Service (IRS) has released its guidelines for tax reporting about cryptocurrency airdrops and hard forks.

Revenue Ruling 2019-24 deals with common questions of taxpayers and practitioners and also addresses issues regarding cryptocurrency transmissions for investors who have cryptocurrencies as a capital asset. 

IRS Commissioner Chuck Rettig said in a statement:

“The new guidance will help taxpayers, and tax professionals better understand how longstanding tax principles apply in this rapidly changing environment. We want to help taxpayers understand the reporting requirements as well as take steps to ensure fair enforcement of the tax laws for those who don’t follow the rules.”

The new guidance builds on Notice 2014-21, determining “general principles of tax law to determine that virtual currency is property for federal tax purposes”.

The vice president of crypto tax calculation platform Bittax, Or Lokay Cohen, remarked on the guidance, saying that it distinguishes hard forks from airdrops, He also said that those who receive new currency in a hard fork will now need to report the assets to the IRS as gross income.

He further remarked that the recent guidance follows a congressional request for the IRS to seek clarity on tax reporting for cryptocurrencies. 

 

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