IRS releases guidance on tax implications of cryptocurrency hard forks

The IRS defines newly created cryptocurrencies as " ordinary income equal to the fair market price”, which is determined at the time of receipt of the asset. Immediately after the appearance of new coins on the blockchain, tax liabilities follow. Tokens distributed during airdrop are also subject to taxation on the same grounds

The situation for taxpayers is quite alarming: lawyers note that now third parties can create tax reporting obligations for holders of cryptocurrencies simply by conducting a fork of the network, the coins of which are owned by the taxpayer. The owner of the cryptocurrency may not even know about the conducted airdrop or hard fork, without being interested in the relevant news.

The published guide raises many questions that do not have a clear answer, including the question of what "getting" cryptocurrency actually means, how the fact of its receipt can be fixed and whether it can be proved. As a result, there is a risk of a tax liability for "phantom income" from cryptocurrency, which in fact has not even been received.