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Free Money, But Not Tax-Free: A Proposal For The Tax Treatment Of Cryptocurrency Hard Forks, Danhui Xu
Free Money, But Not Tax-Free: A Proposal For The Tax Treatment Of Cryptocurrency Hard Forks, Danhui Xu
Fordham Law Review
Cryptocurrency has attracted extraordinary attention as one of the greatest financial innovations in recent years. Equally noticeable are the increasingly frequent cryptocurrency events, such as hard forks. Put simply, a cryptocurrency hard fork happens when a single cryptocurrency splits in two, which results in original coin owners receiving free forked coins. Such hard forks have resulted in billions of dollars distributed to U.S. taxpayers. Despite ongoing regulatory efforts, to date, the Internal Revenue Service (IRS) has yet to take a clear position on the tax treatment of cryptocurrency hard forks. The lack of useful guidance when filing tax returns has …