IRS Still Undecided on Taxation of Promotional Crypto Airdrops

The IRS still hasn’t decided whether promotional “airdrops” of cryptocurrency should be taxable, but may address the question in future guidance, an official said.

October guidance that declared certain cryptocurrency transactions taxable applies to airdrops that result from a “hard fork,” a split of one currency into two, but not to airdrops that don’t result from a hard fork. Airdrops occur when traders receive new coins, often without their request or knowledge.

• The IRS doesn’t yet have a position on whether “promotional” airdrops done for marketing purposes are subject to tax, Christopher Wrobel, an IRS special counsel, said after speaking ...