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The Taxation of Hard Forks
What are the tax implications of a cryptocurrency Hard Fork?  Does the holder of a cryptocurrency that undergoes a Hard Fork realize taxable income? If so, how does one determine the amount of the income and when, exactly, it is received?  These are not easy questions to answer.
What is a Hard Fork? 
A Hard Fork—sometimes referred to as a “Chain Split” or “Coin Split”—occurs when a new branch of a cryptocurrency splits off from the original cryptocurrency.  The new branch shares a common history on the cryptocurrency’s blockchain (its ledger) up until the point of the split, and is thereafter maintained separately on the blockchain ledger.  “In other words, “the ownership history of both the original and forked cryptocurrency trace back to the same block on the blockchain, but going forward, the ledger of each cryptocurrency is independent (i.e., they are not interchangeable).”  American Bar Association, Tax Treatment of Cryptocurrency Hard Forks for Taxable Year 2017.
As a point of reference, two of the more notable Hard Forks were the August 1, 2017, Bitcoin split into bitcoin (BTC) and bitcoin cash (BCH), and the 2016 Ethereum blockchain’s Hard Fork in response to a hacking attack.
A Hard Fork results from a “change to the software ... more

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