US Residents to Report Crypto Assets Received Through Airdrops

The U.S. Internal Revenue Service (IRS) presented amendments to Form 1040 for filing individual income tax returns. The updated return requires residents to report coins received as a result of hard forks.

Tax is imposed on exchanges of cryptocurrency for goods, services, or “other property, including other virtual currencies.” However, a resident is not required to report owning cryptocurrency if they did not trade it during 2020.

The IRS is not interested in transfers of digital assets between taxpayers’ wallets. CoinTracker representative Shehan Chandrasekara noted that for the agency it is the transactions that affect tax obligations that matter.

“At the moment, the Internal Revenue Service seems not to be interested in the amount of crypto assets held by users. You are not required to disclose information about them anywhere, unless taxable transactions were conducted,” explained Chandrasekara.

Recall that in August the agency demanded that all U.S. residents report any dealings with Bitcoin and other cryptocurrencies on the first page of their individual tax returns.

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