Airdrops and hard forks: keep control and value separate

Receipt requires dominion and control

Revenue Ruling 2019-24 distinguishes a hard fork without new units from new units received through an airdrop after a fork. Where the taxpayer receives new units and can control them, income is measured using fair market value at that point. Not every unsolicited token in a wallet fits the facts of that ruling.

Document access before adding a value

Record when you could transfer or dispose of the units, their quantity and the valuation evidence. If an exchange did not support the fork at first, record when access actually became available.

• Do not interact with suspicious airdrops to discover a price.
• Keep the protocol announcement and transaction hash.
• Have uncertain or illiquid receipts reviewed rather than assigning a made-up zero.

Selling the airdrop is another event

Keep the recognized-income value as part of the acquisition record. A later sale or exchange needs its own amount-realized and basis calculation.

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