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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 val

by lacker 7y ago

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. It seems like this will incentivize people to sell off new tokens immediately, in order to pay the taxes they incurred during the fork. To me it seems very unintuitive to tax a hard fork. It is like taxing a stock split. Your asset hasn't really changed, it is just now represented in a different way. Another weird thing about these taxes is that they assume that one of the forks is the "real asset" and the other fork is the "new asset". 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 "real" one. Well, I guess the IRS does not see cryptocurrency the same way as my intuition would.

klodolph 7y ago
From the FAQ: > A21. A hard fork occurs when a cryptocurrency undergoes a protocol change resulting in a permanent diversion from the legacy distributed ledger. This may result in the creation of a new cryptocurrency on a new distributed ledger in addition to the legacy cryptocurrency on the legacy distributed ledger. If your cryptocurrency went through a hard fork, but you did not receive any new cryptocurrency, whether through an airdrop (a distribution of cryptocurrency to multiple taxpayers’ distributed ledger addresses) or some other kind of transfer, you don’t have taxable income. https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions https://www.irs.gov/individuals/international-taxpayers/freq... So with e.g. Bitcoin / Bitcoin Cash fork you would be doing ordinary capital gains, not income. You don’t have “new cryptocurrency”, you have the same cryptocurrency, but on two ledgers because of the fork.
- nullc 7y ago
  The text of the ruling is incredibly unclear. You could read the ruling as saying that if you have coins on both the old system and the new system that you recieved an 'air drop' and owe taxes. Or you could attempt to read it as saying that you only received an 'air drop' if there was a "transfer" and not merely state copying. The latter interpretation is more reasonable in effect but seriously frustrated by the total lack of guidance on setting the cost basis of the resulting assets! Also the language of the ruling comes very close to directly contradicting this interpretation: "Situation 1: A did not receive units of the new cryptocurrency, Crypto N, from the hard fork;". The former interpretation is frustrated by the absurd result that users of eth, bcash, or other centrally administered frequently hardforking cryptocurrencies would owe income tax multiple times over for every one of those coins they own... even though the original systems have largely (but not completely) been ignored, and aren't valued as much. So what, are users of those systems supposed to have over and over against recognized ordinary income for nearly the total value of their holdings and sold the original coins and taken a capital loss on them (which they couldn't deduct against their ordinary income, except in a limited way)?
  - dragonwriter 7y ago
    > The latter interpretation is frustrated by the total lack of guidance on setting the cost basis of the resulting assets! IMO, the most reasonable interpretation without a specific basis-splitting rule, given that the IRS divides a hard fork into a legacy ledger a and a new ledger would be that the basis value for the new ledger entries (being that they are created by the fork at no cost) is zero, with the legacy ledger entries retaining their original basis value.
    - jkepler 7y ago
      Your interpretation makes sense to me. However, the problem is that the IRS didn't actually state that in their limited guidance.
      - dragonwriter 7y ago
        I think it's the most reasonable reading of the guidance, but I would agree that it would be vastly superior if this (or some other treatment) was made quite explicit. Guidance should do a better job of guiding.
        nullc 7y ago
        How do you square your interpretation with the text at the top of page 5? It appears to be saying in situation 1 you have no N-coins at all. By exclusion, situation 2 would apply if you have the new coins and it clearly states taxes are owned on the market value in that case.
        gamblor956 7y ago
        Not sure I understand your confusion. If you don't receive the forked coins (situation 1) you don't have income. It doesn't matter why you didn't get any of the forked coins.
        7y ago
- wmf 7y ago
  It's not obvious that your interpretation is right. During the Bitcoin / Bitcoin Cash fork you received new BCH, especially if you "claimed" any UTXOs on the new chain.
  - bilbo0s 7y ago
    Yeah. I'd encourage everyone to check with tax attorneys to be sure because klodolph's interpretation seems a bit suspect at first blush. Check with an attorney, or preferably two, just to be sure because the consequences for getting this wrong are nontrivial.
  - beaner 7y ago
    You didn't receive anything new. You already had the keys. There was simply a new client created to let you access these alternative coins. If you own bitcoin private keys, you already own coins on an infinite number of hard forks. You're just lacking a client to access them.
    - X6S1x6Okd1st 7y ago
      the IRS sees it differently.
      - stale2002 7y ago
        No, it does not. The IRS specifically refers to when you recieves the tokens, on chain, in a transaction. If there is no additional data, in the blockchain, then it is not an airdrop, according to the IRS.
        nullc 7y ago
        Can you explain what the first couple lines about situation 1 on page 5 mean, according to your interpretation?
        stale2002 7y ago
- lacker 7y ago
  I'm pretty sure the IRS considers BCH to be the new cryptocurrency in that scenario, and considers BTC holders to have "received new cryptocurrency". The more I look through this ruling, the more it seems like it is only designed for people who hold their cryptocurrency at an exchange. At an exchange, the exchange officially declares which coin is the "new one" and which coin is the "old one", so that isn't a problem for users. Plus, there's a clear distinction with whether the exchange provided you with a new asset during the fork, or whether the exchange did not provide you with a new asset during the fork. So if you just use Coinbase, this ruling is perfectly clear. If you control your own wallet, it doesn't make as much sense.
  - modeless 7y ago
    > The more I look through this ruling, the more it seems like it is only designed for people who hold their cryptocurrency at an exchange. I think you're absolutely right. The guidance only makes sense through this lens. It's unfortunate that the IRS didn't base their reasoning on the technical characteristics of the underlying blockchains. There is a whole lot of ambiguity as a result.
    - arcticbull 7y ago
      Nah, it's just up to you to justify the value of the asset when it forks. Frequently that's $0. If it's a meaningful fork, like BTC/BCH/BSV you could easily use the value at listing on the first exchange as the cost basis, as that's what everyone else will do in lieu of a 409(a) type valuation, which of course doesn't exist because crypto doesn't have intrinsic value. It just means more legwork for you. This is also addressed in A24 of the FAQ.
      - zjs 7y ago
        I'm not sure if numbering is stable (so perhaps this was A24 at one point), but I find this the most relevant portion of the FAQ: Q27. I received cryptocurrency that does not have a published value in exchange for property or services. How do I determine the cryptocurrency’s fair market value? A27. When you receive cryptocurrency in exchange for property or services, and that cryptocurrency is not traded on any cryptocurrency exchange and does not have a published value, then the fair market value of the cryptocurrency received is equal to the fair market value of the property or services exchanged for the cryptocurrency when the transaction occurs. If there is not [yet] a published value at the time of the airdrop, A27 seems to suggest that "the fair market value of the cryptocurrency received is equal to the fair market value of the property or services exchanged for the cryptocurrency when the transaction occurs". If you received the cryptocurrency in exchange for nothing, I'd conclude that the fair market value was $0. (IANAL, IANYL, YMMV, etc.)
scarejunba 7y ago
Interesting so if I make a coin, airdrop it to you guys, and enforce only a single sale of one coin for a million dollars to my friend and from him back to me, then leaving the chain untransactable, you're all on the hook for 1 million dollars worth of coin but can't sell it? Fascinating.
- deleted 7y ago
  [deleted]
- onlyrealcuzzo 7y ago
  No. For the same reason you can't create stock in a company and mail people shares, rack up a bunch of debt, and have random people liable for part of the debt. Just because someone "gives" you something, doesn't mean you accepted it and own it.
  - nullc 7y ago
    Can you relate your position back to the text of the ruling? Particularly where it references Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431 (1955)? The standard they are appearing to apply is "undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion".
    - gamblor956 7y ago
      From the example just above, the scam coin is neither realized nor does the recipient have complete dominion.
      - nullc 7y ago
        Realized seems dicey indeed, I can't figure out how 'realized' applies to any fork unless the coins are moved. Complete dominion, OTOH is easy to address. E.g. instead of mailing them the keys, I pull the public keys out of their website's SSL cert. They now have complete dominion.
- gamblor956 7y ago
chatmasta 7y ago
It’s pretty crazy that we’ve even gotten to the point where there is an FAQ about “hard forks” on the IRS website. You have to give the US government a certain amount of kudos for how it’s handled cryptocurrency so far; it’s been far from perfect, but you can tell they are trying to be accommodating and employ common sense.
- freeAgent 7y ago
  I think the tax treatment of cryptocurrency is nonsensical if one views and attempts to use it as a currency rather than an investment. There is no exclusion of small transactions from capital gains reporting requirements like there is for foreign fiat currencies. That means that actual currency users must track and report cost basis and gains on every single transaction, no matter how small, in order to remain in compliance. This tax treatment is overly burdensome and stifles legal cryptocurrency usage and adoption in the US.
  - wglb 7y ago
    Keep in mind that if you swap houses that you bought as an investment, there is still the possibility of a tax liability. Barter is not excluded from taxation.
    - freeAgent 7y ago
      The first $250-500k of capital gains on houses is tax-free when you sell your house. I would argue that the IRS should treat cryptocurrency like other foreign currencies where the first $200 of capital gains is not taxed: https://www.irs.gov/publications/p525#en_US_2018_publink1000229538 https://www.irs.gov/publications/p525#en_US_2018_publink1000... That would just put cryptocurrency on similar footing as any other currency.
    - Hydraulix989 7y ago
      It would be considered a 1031 Like-Kind exchange though.
- hdfbdtbcdg 7y ago
dnprock 7y ago
I think IRS can work out the hard fork situation by letting individual declare which side he/she considers airdrop. There's no tax due right away. You declare it once at the time you sell. Once you decide, you can't change that election.
arcticbull 7y ago
> It is like taxing a stock split. Your asset hasn't really changed, it is just now represented in a different way. It's not like taxing a stock split. In a 1:2 stock split, you go from having 1 share of AAPL worth $100 to 2 shares of AAPL worth $50 each for a total of $100. It's the same ticker, and represents beneficial ownership of the same fraction of Apple, Inc. A better analogy might be a dividend. If you hold 1 share of AAPL and it issues a dividend, you now have 1 share of AAPL and + $2.00. This $2.00 is totally unrelated to your ownership stake of AAPL (which of course cryptos don't represent anyways), new value, and you will owe taxes on this event. IMO a crypto fork amounts to a taxable distribution. A capital gain in these circumstances is actually what you want, because it would be offset by a future capital loss. To your point, the original distribution "plants the flag" with respect to the amount it's worth. If the value drops to 1/3 by the end of the first trading day like a typical crypto pump-n-dump, when you then dispose of that asset, your capital loss from the sale offsets the capital gain from the "flag plant" and you only pay taxes on the new value generated. It's actually quite fair. > It seems like this will incentivize people to sell off new tokens immediately, in order to pay the taxes they incurred during the fork. Not necessarily immediately but definitely by the end of the quarter or by the end of the tax year.
- biggestdecision 7y ago
  I worry that this amounts to a requirement from the IRS to engage with many shady cryptocurrency forks. Entering your BTC wallet details into ShadyCoin's wallet app probably isn't a good idea, even if 1 ShadyCoin is apparently worth a bajillion dollars.
  - evrydayhustling 7y ago
    Yes, it even created a new type of shadyfork strategy: you can punish any crypto asset holders by creating a hard fork, then booking trades that establish a high market value for the new asset. In fact, the way this rule is written, it's not even clear that you have to copy the whole block chain. You could issue a new currency to any address and cause them a taxable event. I suspect this rule wouldn't hold up in court.
- 7y ago
tuesdayrain 7y ago
In my opinion it doesn't make sense to pay taxes on a fork until you sell it and realize the gains. Otherwise do you pay taxes a second time when you do sell it?
- jron 7y ago
  I agree. The IRS should simply mandate that forked coins have a purchase price of 0 USD. When sold, the tax event occurs and the seller simply pays the short term or long term realized gain.
  - gamblor956 7y ago
    They do have a purchase price of $0. That's exactly why it's taxable income. If you had to pay market value for the forked coins they wouldn't be taxed when you received them.
    - mths 7y ago
      Quickly, what's X*0? I'm aware that there's situations where a CGT event occurs even without selling your asset, but this shouldn't be one of them.
      - gamblor956 7y ago
        It's not a capital gains transaction. It's a receipt of income transaction. You receive crypto worth $X that you paid $0 for. Thus, you have $X in income and owe income taxes on that. If you paid $Y for the crypto, then you had $X-$Y in income (similar to in-the-money stock options). Your cost basis would be $Y in the $X of coins, so if you ever sell them, then your income is $Z (value at time of sale) less $Y in capital gains.
- wmf 7y ago
  You would pay tax a second time, but only on the difference between the fork price and the price you sold for. They're not trying to double-tax you on the same money.

by lacker 7y ago

klodolph 7y ago

From the FAQ: > A21. A hard fork occurs when a cryptocurrency undergoes a protocol change resulting in a permanent diversion from the legacy distributed ledger. This may result in the creation of a new cryptocurrency on a new distributed ledger in addition to the legacy cryptocurrency on the legacy distributed ledger. If your cryptocurrency went through a hard fork, but you did not receive any new cryptocurrency, whether through an airdrop (a distribution of cryptocurrency to multiple taxpayers’ distributed ledger addresses) or some other kind of transfer, you don’t have taxable income. https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions https://www.irs.gov/individuals/international-taxpayers/freq... So with e.g. Bitcoin / Bitcoin Cash fork you would be doing ordinary capital gains, not income. You don’t have “new cryptocurrency”, you have the same cryptocurrency, but on two ledgers because of the fork.

nullc 7y ago
The text of the ruling is incredibly unclear. You could read the ruling as saying that if you have coins on both the old system and the new system that you recieved an 'air drop' and owe taxes. Or you could attempt to read it as saying that you only received an 'air drop' if there was a "transfer" and not merely state copying. The latter interpretation is more reasonable in effect but seriously frustrated by the total lack of guidance on setting the cost basis of the resulting assets! Also the language of the ruling comes very close to directly contradicting this interpretation: "Situation 1: A did not receive units of the new cryptocurrency, Crypto N, from the hard fork;". The former interpretation is frustrated by the absurd result that users of eth, bcash, or other centrally administered frequently hardforking cryptocurrencies would owe income tax multiple times over for every one of those coins they own... even though the original systems have largely (but not completely) been ignored, and aren't valued as much. So what, are users of those systems supposed to have over and over against recognized ordinary income for nearly the total value of their holdings and sold the original coins and taken a capital loss on them (which they couldn't deduct against their ordinary income, except in a limited way)?
- dragonwriter 7y ago
  > The latter interpretation is frustrated by the total lack of guidance on setting the cost basis of the resulting assets! IMO, the most reasonable interpretation without a specific basis-splitting rule, given that the IRS divides a hard fork into a legacy ledger a and a new ledger would be that the basis value for the new ledger entries (being that they are created by the fork at no cost) is zero, with the legacy ledger entries retaining their original basis value.
  - jkepler 7y ago
    Your interpretation makes sense to me. However, the problem is that the IRS didn't actually state that in their limited guidance.
    - dragonwriter 7y ago
      I think it's the most reasonable reading of the guidance, but I would agree that it would be vastly superior if this (or some other treatment) was made quite explicit. Guidance should do a better job of guiding.
      - nullc 7y ago
        How do you square your interpretation with the text at the top of page 5? It appears to be saying in situation 1 you have no N-coins at all. By exclusion, situation 2 would apply if you have the new coins and it clearly states taxes are owned on the market value in that case.
        gamblor956 7y ago
        Not sure I understand your confusion. If you don't receive the forked coins (situation 1) you don't have income. It doesn't matter why you didn't get any of the forked coins.
        7y ago
wmf 7y ago
It's not obvious that your interpretation is right. During the Bitcoin / Bitcoin Cash fork you received new BCH, especially if you "claimed" any UTXOs on the new chain.
- bilbo0s 7y ago
  Yeah. I'd encourage everyone to check with tax attorneys to be sure because klodolph's interpretation seems a bit suspect at first blush. Check with an attorney, or preferably two, just to be sure because the consequences for getting this wrong are nontrivial.
- beaner 7y ago
  You didn't receive anything new. You already had the keys. There was simply a new client created to let you access these alternative coins. If you own bitcoin private keys, you already own coins on an infinite number of hard forks. You're just lacking a client to access them.
  - X6S1x6Okd1st 7y ago
    the IRS sees it differently.
    - stale2002 7y ago
      No, it does not. The IRS specifically refers to when you recieves the tokens, on chain, in a transaction. If there is no additional data, in the blockchain, then it is not an airdrop, according to the IRS.
      - nullc 7y ago
        Can you explain what the first couple lines about situation 1 on page 5 mean, according to your interpretation?
        stale2002 7y ago
lacker 7y ago
I'm pretty sure the IRS considers BCH to be the new cryptocurrency in that scenario, and considers BTC holders to have "received new cryptocurrency". The more I look through this ruling, the more it seems like it is only designed for people who hold their cryptocurrency at an exchange. At an exchange, the exchange officially declares which coin is the "new one" and which coin is the "old one", so that isn't a problem for users. Plus, there's a clear distinction with whether the exchange provided you with a new asset during the fork, or whether the exchange did not provide you with a new asset during the fork. So if you just use Coinbase, this ruling is perfectly clear. If you control your own wallet, it doesn't make as much sense.
- modeless 7y ago
  > The more I look through this ruling, the more it seems like it is only designed for people who hold their cryptocurrency at an exchange. I think you're absolutely right. The guidance only makes sense through this lens. It's unfortunate that the IRS didn't base their reasoning on the technical characteristics of the underlying blockchains. There is a whole lot of ambiguity as a result.
  - arcticbull 7y ago
    Nah, it's just up to you to justify the value of the asset when it forks. Frequently that's $0. If it's a meaningful fork, like BTC/BCH/BSV you could easily use the value at listing on the first exchange as the cost basis, as that's what everyone else will do in lieu of a 409(a) type valuation, which of course doesn't exist because crypto doesn't have intrinsic value. It just means more legwork for you. This is also addressed in A24 of the FAQ.
    - zjs 7y ago
      I'm not sure if numbering is stable (so perhaps this was A24 at one point), but I find this the most relevant portion of the FAQ: Q27. I received cryptocurrency that does not have a published value in exchange for property or services. How do I determine the cryptocurrency’s fair market value? A27. When you receive cryptocurrency in exchange for property or services, and that cryptocurrency is not traded on any cryptocurrency exchange and does not have a published value, then the fair market value of the cryptocurrency received is equal to the fair market value of the property or services exchanged for the cryptocurrency when the transaction occurs. If there is not [yet] a published value at the time of the airdrop, A27 seems to suggest that "the fair market value of the cryptocurrency received is equal to the fair market value of the property or services exchanged for the cryptocurrency when the transaction occurs". If you received the cryptocurrency in exchange for nothing, I'd conclude that the fair market value was $0. (IANAL, IANYL, YMMV, etc.)

scarejunba 7y ago

Interesting so if I make a coin, airdrop it to you guys, and enforce only a single sale of one coin for a million dollars to my friend and from him back to me, then leaving the chain untransactable, you're all on the hook for 1 million dollars worth of coin but can't sell it? Fascinating.

deleted 7y ago
[deleted]
onlyrealcuzzo 7y ago
No. For the same reason you can't create stock in a company and mail people shares, rack up a bunch of debt, and have random people liable for part of the debt. Just because someone "gives" you something, doesn't mean you accepted it and own it.
- nullc 7y ago
  Can you relate your position back to the text of the ruling? Particularly where it references Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431 (1955)? The standard they are appearing to apply is "undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion".
  - gamblor956 7y ago
    From the example just above, the scam coin is neither realized nor does the recipient have complete dominion.
    - nullc 7y ago
      Realized seems dicey indeed, I can't figure out how 'realized' applies to any fork unless the coins are moved. Complete dominion, OTOH is easy to address. E.g. instead of mailing them the keys, I pull the public keys out of their website's SSL cert. They now have complete dominion.
gamblor956 7y ago

chatmasta 7y ago

It’s pretty crazy that we’ve even gotten to the point where there is an FAQ about “hard forks” on the IRS website. You have to give the US government a certain amount of kudos for how it’s handled cryptocurrency so far; it’s been far from perfect, but you can tell they are trying to be accommodating and employ common sense.

freeAgent 7y ago
I think the tax treatment of cryptocurrency is nonsensical if one views and attempts to use it as a currency rather than an investment. There is no exclusion of small transactions from capital gains reporting requirements like there is for foreign fiat currencies. That means that actual currency users must track and report cost basis and gains on every single transaction, no matter how small, in order to remain in compliance. This tax treatment is overly burdensome and stifles legal cryptocurrency usage and adoption in the US.
- wglb 7y ago
  Keep in mind that if you swap houses that you bought as an investment, there is still the possibility of a tax liability. Barter is not excluded from taxation.
  - freeAgent 7y ago
    The first $250-500k of capital gains on houses is tax-free when you sell your house. I would argue that the IRS should treat cryptocurrency like other foreign currencies where the first $200 of capital gains is not taxed: https://www.irs.gov/publications/p525#en_US_2018_publink1000229538 https://www.irs.gov/publications/p525#en_US_2018_publink1000... That would just put cryptocurrency on similar footing as any other currency.
  - Hydraulix989 7y ago
    It would be considered a 1031 Like-Kind exchange though.
hdfbdtbcdg 7y ago

dnprock 7y ago

I think IRS can work out the hard fork situation by letting individual declare which side he/she considers airdrop. There's no tax due right away. You declare it once at the time you sell. Once you decide, you can't change that election.

arcticbull 7y ago

> It is like taxing a stock split. Your asset hasn't really changed, it is just now represented in a different way. It's not like taxing a stock split. In a 1:2 stock split, you go from having 1 share of AAPL worth $100 to 2 shares of AAPL worth $50 each for a total of $100. It's the same ticker, and represents beneficial ownership of the same fraction of Apple, Inc. A better analogy might be a dividend. If you hold 1 share of AAPL and it issues a dividend, you now have 1 share of AAPL and + $2.00. This $2.00 is totally unrelated to your ownership stake of AAPL (which of course cryptos don't represent anyways), new value, and you will owe taxes on this event. IMO a crypto fork amounts to a taxable distribution. A capital gain in these circumstances is actually what you want, because it would be offset by a future capital loss. To your point, the original distribution "plants the flag" with respect to the amount it's worth. If the value drops to 1/3 by the end of the first trading day like a typical crypto pump-n-dump, when you then dispose of that asset, your capital loss from the sale offsets the capital gain from the "flag plant" and you only pay taxes on the new value generated. It's actually quite fair. > It seems like this will incentivize people to sell off new tokens immediately, in order to pay the taxes they incurred during the fork. Not necessarily immediately but definitely by the end of the quarter or by the end of the tax year.

biggestdecision 7y ago
I worry that this amounts to a requirement from the IRS to engage with many shady cryptocurrency forks. Entering your BTC wallet details into ShadyCoin's wallet app probably isn't a good idea, even if 1 ShadyCoin is apparently worth a bajillion dollars.
- evrydayhustling 7y ago
  Yes, it even created a new type of shadyfork strategy: you can punish any crypto asset holders by creating a hard fork, then booking trades that establish a high market value for the new asset. In fact, the way this rule is written, it's not even clear that you have to copy the whole block chain. You could issue a new currency to any address and cause them a taxable event. I suspect this rule wouldn't hold up in court.
7y ago

tuesdayrain 7y ago

In my opinion it doesn't make sense to pay taxes on a fork until you sell it and realize the gains. Otherwise do you pay taxes a second time when you do sell it?

jron 7y ago
I agree. The IRS should simply mandate that forked coins have a purchase price of 0 USD. When sold, the tax event occurs and the seller simply pays the short term or long term realized gain.
- gamblor956 7y ago
  They do have a purchase price of $0. That's exactly why it's taxable income. If you had to pay market value for the forked coins they wouldn't be taxed when you received them.
  - mths 7y ago
    Quickly, what's X*0? I'm aware that there's situations where a CGT event occurs even without selling your asset, but this shouldn't be one of them.
    - gamblor956 7y ago
      It's not a capital gains transaction. It's a receipt of income transaction. You receive crypto worth $X that you paid $0 for. Thus, you have $X in income and owe income taxes on that. If you paid $Y for the crypto, then you had $X-$Y in income (similar to in-the-money stock options). Your cost basis would be $Y in the $X of coins, so if you ever sell them, then your income is $Z (value at time of sale) less $Y in capital gains.
wmf 7y ago
You would pay tax a second time, but only on the difference between the fork price and the price you sold for. They're not trying to double-tax you on the same money.