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by Paul Bonner | Oct 23, 2019
A “hard fork” of a cryptocurrency owned by a taxpayer does not result in gross income for a taxpayer if the taxpayer receives no units of the new cryptocurrency, but taxpayers receiving an “airdrop” of units of a new cryptocurrency after a hard fork have ordinary gross income from the airdrop, the IRS ruled in Rev. Rul. 2019-24, issued Wednesday. The IRS also updated its Virtual Currency Transactions frequently asked questions on its website to reflect the ruling.
Rev. Rul. 2019-24 supplements basic guidance on the tax treatment of virtual currency that the Service issued in 2014 (Notice 2014-21).Taxpayers and practitioners, the latter including the AICPA, have been pressing for more guidance on the tax treatment of virtual currency and its many new and evolving types of transactions.
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Source: Journal of Accountancy
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