Showing posts from October, 2019

New Revenue Rule on Crypto

Disclaimer 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