A crypto airdrop is when digital tokens or coins are distributed, usually for free, to specific wallet addresses.
- Blockchain projects often use airdrops to promote their currency, encourage adoption, and reward existing holders.
- To qualify, you may need to complete tasks like sharing on social media or holding a certain amount of another cryptocurrency.
Using the Airdrop category
You can change a Receive transaction category to Airdrop. Then, review your Airdrop transactions by tax year from the Tax page, alongside the capital gains that are already tracked.
Tax treatment of Airdop transactions
If you categorize a transaction as an Airdrop in CoinTracker, it will be treated as a taxable event.
Learn more about how the IRS treats crypto airdrops as income, with the fair market value at the time of receipt serving as the basis for the crypto until you dispose of it.