<story><title>IRS issues additional guidance on tax treatment for cryptocurrency</title><url>https://www.irs.gov/newsroom/virtual-currency-irs-issues-additional-guidance-on-tax-treatment-and-reminds-taxpayers-of-reporting-obligations</url></story><parent_chain></parent_chain><comment><author>lacker</author><text>So if you get a new coin from a hard fork, you owe taxes on the fair market value of that new coin you get. This seems pretty dangerous - if the fair market value is high on the first day of trading, but declines a lot, you could get taxed on value that you never realized.&lt;p&gt;It seems like this will incentivize people to sell off new tokens immediately, in order to pay the taxes they incurred during the fork.&lt;p&gt;To me it seems very unintuitive to tax a hard fork. It is like taxing a stock split. Your asset hasn&amp;#x27;t really changed, it is just now represented in a different way.&lt;p&gt;Another weird thing about these taxes is that they assume that one of the forks is the &amp;quot;real asset&amp;quot; and the other fork is the &amp;quot;new asset&amp;quot;. In practice, it seems like a lot of times a fork happens along with a lot of argument about which side of the fork is the &amp;quot;real&amp;quot; one.&lt;p&gt;Well, I guess the IRS does not see cryptocurrency the same way as my intuition would.</text></comment>
<story><title>IRS issues additional guidance on tax treatment for cryptocurrency</title><url>https://www.irs.gov/newsroom/virtual-currency-irs-issues-additional-guidance-on-tax-treatment-and-reminds-taxpayers-of-reporting-obligations</url></story><parent_chain></parent_chain><comment><author>floatingatoll</author><text>If you hold pre-fork currency, and there is a hard fork: IF you gain any of the new currency THEN it&amp;#x27;s income ELSE it&amp;#x27;s not.&lt;p&gt;To quote the final paragraph, emphasis mine:&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.irs.gov&amp;#x2F;pub&amp;#x2F;irs-drop&amp;#x2F;rr-19-24.pdf&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.irs.gov&amp;#x2F;pub&amp;#x2F;irs-drop&amp;#x2F;rr-19-24.pdf&lt;/a&gt;&lt;p&gt;HOLDINGS&lt;p&gt;(1) A taxpayer &lt;i&gt;does not&lt;/i&gt; have gross income under § 61 as a result of a hard fork of a cryptocurrency the taxpayer owns &lt;i&gt;if&lt;/i&gt; the taxpayer &lt;i&gt;does not receive&lt;/i&gt; units of a &lt;i&gt;new cryptocurrency&lt;/i&gt;.&lt;p&gt;(2) A taxpayer &lt;i&gt;has&lt;/i&gt; gross income, ordinary in character, under § 61 as a result of an airdrop of a new cryptocurrency following a hard fork &lt;i&gt;if&lt;/i&gt; the taxpayer &lt;i&gt;receives units of new cryptocurrency&lt;/i&gt;.</text></comment>