Taxes for Airdrops and Rewards?

[Harlot]

For the Airdrop itself you I think with what squatter said it is treated as an "ordinary income" in the IRS which I'm sure will defer to every country as probably some countries might consider this as some form of donation rather than income. For you to realize capital gains is simply selling your received cryptocurrency above the fair market value during the airdrop had happened. But if you simply want to avoid this tax I think selling it right away without risking any kind of devaluation for that crypto is a good alternative for you.

[figmentofmyass]

What if you don't even know what was the price of that coin when you received it?  Example either that coin is now 0 or doesn't exist or very little but coinmarketcap doesn't show anything on it?

we're still talking about staking rewards, right? can you give us an example of a coin this situation applies to?

technically, in a legal sense, it doesn't matter if you can't find the data now. you're still liable for the fair market value of the income received when you received it. if markets existed at the time (meaning your receipts had value and is thus income) then the data is probably out there somewhere.

in practice, nobody (including the IRS) is likely to care about or even notice your worthless, dead coins.

I mean im sure there are some wallets that might give you tons of coins for staking but you dont have a clue how much its worth?  What if its not worth nothing?  Also if its worth pennies and you get them every few days, you going to record 50 transactions for the year the moment you sell them each time?

this is why people say the USA tax code is really fucked up for mining/staking and also forks/airdrops. it's way too complicated and burdensome.

[imstillthebest]

this is the downside of crypto being taxed because they are volatile but they should have exclude micro earning such as airdrop because the coins youl get here are literally unpredictable  aside from volalitity of cryptos in which a normal crypro is still predictable or sure to have a better future .

 how can you imediately sell the airdrop you get when they are not listed yet or when thier value is verry low  .

[jerry0]

The issue seem to be... you need to record an airdrop every single time you receive it.  So if you receive weird coins like magic coin or weird coins that either are not real coins or scam coins, certain you dont put anything in that right?  Also what if they are not listed or their value is like a penny or something ridiculous?  When you sell it, you going to put yea i bought this coin for a penny and sold it for a penny a hundred times if you receive it a hundred times in a year when you sell it?  Whether you sell immediately or later on... that doesn't even make sense.


I could understand if you get x amount of coins every single week or month and those coins are worth something... but most coins either worth nothing or worth little right?  Now what if u get an airdrop to your wallet for a few hundred dollars and you had no idea of this.  Then later on down the line you check your wallet and see... hey i got these coins as airdrop or staking or reward... then you see its now worth 0 when it might been worth 500 months ago when it came out.  But even if it was 500 dollars worth, unless you check your wallet all the time, how would you even know if you receive it until you check later on?


It seems even more crazy when you sell the staking coin/airdrop.  I understand the receiving part of it in usd... but how does that make sense?  I mean unless you sell it or trade it... makes no sense at all.  Someone could literally have 5 figures in crypto transactions when selling staked coins or airdrops right?  Coud you imagine how the recording of the transactions woudl look when it show bought fiber coin for a penny and sold for a penny or less and do it hundred times and doing it with many other coins?

[Upgate]

Airdrop token is the most worthless penny ever received. Before distribution, bounty airdrop might promise $10-$20 of their token but after distribution you'll be getting 0.01cent in your wallet. The same thing also applies to bounty project. They worth not doing or hoping upon for a long time