Can the cost basis of a cryptocurrency be adjusted in case of a hard fork or airdrop?

3 answers

• Jan 13, 2022 · 3 years ago
  Yes, the cost basis of a cryptocurrency can be adjusted in case of a hard fork or airdrop. When a hard fork occurs, a new cryptocurrency is created, and the cost basis of the original cryptocurrency is divided between the new cryptocurrency and the original one. This can impact the tax implications as it may result in a taxable event for the new cryptocurrency. It is important to keep track of the cost basis and consult with a tax professional to ensure compliance with tax regulations.
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• Jan 13, 2022 · 3 years ago
  Absolutely! When a hard fork or airdrop happens, the cost basis of a cryptocurrency can be adjusted. This means that the value of the newly created cryptocurrency will be added to the cost basis of the original cryptocurrency. It's crucial to keep accurate records of these events for tax purposes. If you're unsure about how to handle the tax implications, it's always a good idea to consult with a tax professional who specializes in cryptocurrency.
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• Jan 13, 2022 · 3 years ago
  Yes, the cost basis of a cryptocurrency can be adjusted in case of a hard fork or airdrop. For example, if you hold Bitcoin and a hard fork occurs, resulting in the creation of a new cryptocurrency like Bitcoin Cash, you would need to allocate a portion of your original Bitcoin cost basis to the new cryptocurrency. This can have tax implications, as you may need to report any gains or losses from the new cryptocurrency. It's important to keep track of these events and consult with a tax advisor to ensure compliance with tax laws.
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