Showing posts from October, 2019

New Revenue Rule on Crypto


The new rule (Rev. Rule 2019-24) can be found here.  It has not yet been published in an Internal Revenue Bulletin, but presumably will be soon.  There has also been an update to the IRS's FAQs on Crypto located here.

The point of the new Rev. Rule is to address what happens when you receive a new series of tokens in connection with a hard fork (you have taxable ordinary income once you can trade the tokens received).

However, there are a number of other statements in the ruling that were interesting.

First, there had been some ambiguity before as to whether you had taxable income if the protocol changed in a material way, but you simply kept the same number of tokens.  This Rev. Rule now clearly says that such a change is not a taxable event -- apparently even if the network changes dramatically, say from an ERC-20 network to something else.  I believe that conclusion supports the suggestion elsewhere in this blog that Crypto Sponsors should create a genesis block to ho…