IRS about hard forks and airdrops

12 Oct 2019 by rate3

Two days ago IRS issued a hilarious document, with no name - just a number 26 CFR 1.61-1. It describes how airdrops and hard forks are to be now treated from the taxes perspectives. Basically - both are recognized as a gross income right from the moment its received.

But that's not why this piece is hilarious, of course. It's how IRS "specialists" describe hard forks and airdrops.

Citing: "A hard fork is unique (zic!) to distributed ledger technology and occurs when a cryptocurrency (zic!) on a distributed ledger undergoes a protocol change (zic!) resulting in a permanent diversion (zic!) from the legacy (zic!) or (zic!) existing distributed ledger."

Here's how those people describe airdrop taxable event:

"An airdrop is a means of distributing units of a cryptocurrency to the distributed ledger addresses of multiple taxpayers. ... Cryptocurrency from an airdrop generally (zic!) is received on the date and at the time it is recorded on the distributed ledger. However, a taxpayer may constructively (zic!) receive cryptocurrency prior to the airdrop being recorded on the distributed ledger."

Frankly saying, I do not know how to comment on that, except I really hope that those other government people, which are responsible for nuclear warheads have a bit better understanding of their field, than those which are responsible for levies.