IRS CCA: Guidance on Individual Holding a Cryptocurrency Native to a Blockchain Distributed Ledger that Undergoes a Protocol Upgrade (IRC §1001)

The IRS April 21 issued guidance on the tax consequences to an individual who holds a cryptocurrency native to a blockchain distributed ledger that undergoes a protocol upgrade. The guidance states: (1) an individual taxpayer, who holds 10 units of C, a cryptocurrency native to a distributed ledger that undergoes a protocol upgrade that changes the consensus mechanism by which transactions are validated, doesn’t realize gain or loss on those units under I.R.C. §1001 as a result of the protocol upgrade; and (2) an individual taxpayer doesn’t have an item of gross income under §61(a) as a result of the ...