Guides › Crypto Airdrops and Hard Forks: Is It Income?

Crypto Airdrops and Hard Forks: Is It Income?

Short answer: For 2025 and later, the IRS digital asset FAQs (Part II, FAQ 104-107) say that if a hard fork gives you no new digital assets you have no taxable income, and if you receive new digital assets following a hard fork you have ordinary income equal to their fair market value when received, provided you have dominion and control over them (generally when the hard fork is recorded on the ledger); your basis equals the amount you included in income. The earlier FAQs (before 2025) say the same for an airdrop that follows a hard fork. A soft fork is not income. The IRS FAQs do not address an airdrop that is not linked to a hard fork.

What the FAQs say

• Hard fork, no new coins (FAQ 22): no income.
• Hard fork then airdrop (FAQ 23-24): taxable income in the year you receive the new coins, valued at fair market value when the airdrop is recorded on the ledger and you can transfer, sell or exchange it.
• Basis (FAQ 25): your basis equals the amount you included in income. Revenue Ruling 2019-24 is cited.
• Holding period (FAQ 29): begins the day after you receive the coins.
• Soft fork (FAQ 30): no income.
• Value (FAQ 26-28): if received through an exchange, the value recorded by the exchange in dollars; for peer-to-peer receipts, the value at the date and time recorded on the ledger, with a blockchain explorer value accepted as evidence; unlisted coins take the fair market value of what was exchanged for them.

Reporting

The Form 1040 digital assets question says to answer Yes if you received digital assets from an airdrop as it relates to a hard fork (IRS, Digital assets). Ordinary income goes on Form 1040 or Schedule 1 (FAQ 44); a later sale goes on Form 8949 and Schedule D (FAQ 43). You must report even if you receive no information return (FAQ 42).

Made-up illustration

You receive new coins worth $200 from an airdrop after a fork, when you can first move them. You report $200 of ordinary income, and your basis is $200. If you later sell for $350, the gain is $150.

Staking and rewards

This page covers forks and airdrops that follow a fork only. See staking rewards and the 1099-DA; this page covers forks and airdrops only.

Related

Paid in crypto for work · Staking rewards · No 1099-DA? Still report · Digital asset question

FAQ

Is a Form 1099 issued for airdrops? Not covered here; FAQ 42 says you report regardless.

Do the FAQs apply in 2026? They state they generally apply before 2025; later guidance not read.

What we could not verify

• The IRS FAQs do not cover airdrops that are not connected with a hard fork; we did not find IRS guidance on that case in the pages we read.
• Rev. Rul. 2019-24 itself (cited by the FAQs) was not read.
• Whether a 1099-DA reports airdrops (not stated).
• Part II FAQ 104-109 and the Form 1040 page were reported by our checker; we read Part I ourselves.

Sources (official)

• IRS, Frequently asked questions on virtual currency transactions — https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions (read in full 17 October 2026; FAQs 22-30, 42-44; stated to apply generally to transactions before January 1, 2025)
• IRS, Frequently asked questions on digital asset transactions (Part II, FAQ 104-109) — https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-digital-asset-transactions
• IRS, Digital assets (reviewed September 2, 2026) — https://www.irs.gov/filing/digital-assets

Try the in-browser checker →

Not tax advice. Examples use made-up figures. Nothing here has been reviewed by a tax professional. We may earn commissions from affiliate links where marked; see the disclosure.