If the new coin is taxable, the capital gain would be treated as a windfall under the test set out by Commissioner v. These rewards are also taxable.Ī cryptocurrency hard fork is like a lottery winning for crypto investors. Some DeFi protocols, such as Compound, also reward staking crypto. Some platforms, such as Gemini and BlockFi, offer interest rewards for holding certain cryptocurrencies. Cryptocurrency hard forks are considered taxable events if the new cryptocurrency is sold for a price higher than its cost basis. If you own a cryptocurrency that has undergone a hard fork (diversion from a legacy distributed ledger), you may be interested in whether the capital gain from that new coin is taxable. See also Monkey Ball Crypto Will Solve Distribution Concerns Capital gains from hard forks are taxed at a lower crypto tax rate
