Revenue Ruling 2019-24 defines a hard fork as a protocol change that permanently splits a blockchain from its original ledger. After the split, the old coin stays on its ledger, and any new coin is recorded on a new one. A soft fork changes the protocol without splitting the ledger or creating a coin, so it brings no income.
A hard fork brings income only if new coins are airdropped to you. Their fair market value is ordinary income, generally measured when the airdrop is recorded on the ledger, provided you can control the coins then. That value also becomes your basis in the new coins.
The control test can delay hard fork income. If your exchange does not support the new coin, you have no income from it yet. For tax purposes, you receive the coins once you can sell or move them.
Sources
- IRS, Rev. Rul. 2019-24 (hard forks and airdrops)
- IRS, Frequently asked questions on virtual currency transactions
Reviewed and updated September 2026. General information, not advice for your situation.