Managing the IRS Crackdown Using Staking, Airdrops, and Hard Forks

<?xml encoding="utf-8" ?>In 2025, the IRS is looking forward to taking its bite out of you. Did you get crypto in 2025 as a result of staking, an airdrop, or a hard fork? The IRS is coming after you, and now they have the means to do so. <a href="https://www.leadingtaxgroup.com/" style="color:blue; text-decoration:underline" target="_blank" rel=" noopener">Cryptocurrency taxation</a> can be described as a watershed moment in the monumental 2026 tax filing season.  The era of disguising passive crypto income is officially long gone, now that Form 1099-DA debuts, and they have started using summonses to identify tax evaders by the name John Doe. Always rely on experts (like a <a href="https://www.leadingtaxgroup.com/personal-tax-settlements/" style="color:blue; text-decoration:underline" target="_blank" rel=" noopener">business tax lawyer</a>) and plan your future. <h2>Understand the Core Rules </h2>Cryptocurrency is considered by the IRS as property, and the source of acquisition is what dictates the taxation. You do not have a capital gain when you receive crypto as a result of staking, airdrop, or hard forks (but not yet). You are, on the contrary, making commonplace money.<ol style="list-style-type:lower-alpha"> <li>Staking Rewards </li> </ol>In the case of staking tokens in which you are rewarded, you must account for income based on the fair market value (FMV) of the tokens on the date and time you acquire dominion and control over the tokens.<ol start="2" style="list-style-type:lower-alpha"> <li>Airdrops </li> </ol>When you are airdropped without any solicitation, the FMV of the airdrop at the time it gets into your wallet is taxable income.<ol start="3" style="list-style-type:lower-alpha"> <li>Hard Forks </li> </ol>According to Revenue Ruling 2019-24, when you receive a hard fork of a new cryptocurrency and that hard fork results in a new cryptocurrency, the hard fork is considered taxable income. In case you do not get the new coin (e.g., you held on an exchange not originally supporting it), you do not get income until you take it on.<h2>What about the Enforcement Reality? </h2>The regulations are not novel; just the application is. Form 1099-DA will be required to record the sale and disposal of digital assets in centralized exchanges, and will be required on the 2025 tax year (filed in 2026). Although this form now centers on the gross proceeds (not cost basis) of brokers, this provides the IRS with a clear view of what you are doing. Discuss your issues with a professional (like a <a href="https://www.leadingtaxgroup.com/top-cryptocurrency-tax-attorney-california/" style="color:blue; text-decoration:underline" target="_blank" rel=" noopener">crypto tax attorney</a>)In addition to that, the IRS is still using the so-called John Doe summonses to force exchanges to provide the records of U.S. taxpayers who might not be reported to have earned income. In case you put assets in a foreign exchange or were airdropped a wallet that you left in your pocket, there is a high chance the IRS will have it eventually.<h2>Finding the Critical Next Step </h2>After paying income tax on staking rewards or an airdrop, you are not entirely done with tax. That crypto has an equal cost basis to the value of what you acknowledged as income. Should you sell that crypto later at a higher price than the price you received it on the day you received it, then you will be subject to capital gains tax on the increase. Sell it less, and you make a loss of capital.<h2>Tricks that Will Help You During Survival </h2>To make it through this terrain, a person needs more than good intentions. These are important guidelines to remain in compliance:<ol> <li style="text-align:justify">When you move assets with a stake between wallets or exchanges, the exchange you are selling at will probably not know what your cost basis was. </li> <li style="text-align:justify">It is not possible that a single exchange can accurately decide to choose the cost basis on all the sales, cautions CPA Sharon Yip, whose advice is given to people with many accounts. This is what you are in charge of following up on.</li> <li style="text-align:justify">The IRS has also mandated that a taxpayer record the basis of cost on a wallet-by-wallet or account-by-account basis rather than as a universal pool. </li> <li style="text-align:justify">Assuming that you sold assets in Wallet A, it is only the cost basis in Wallet A that can be used to determine your gain.</li> <li style="text-align:justify">Tax attorney David Klasing points out that in case you are unable to establish the historical trace of assets, the IRS will default in treating the entire balance as having a zero-cost basis. </li> </ol>The crypto Wild West is officially dead. The IRS has plenty of data and is ready to <a href="https://www.leadingtaxgroup.com/irs-personal-tax-audit/" style="color:blue; text-decoration:underline" target="_blank" rel=" noopener">audit</a> with AI on par, blockchain forensics, and with new <a href="https://www.leadingtaxgroup.com/tax-info/" style="color:blue; text-decoration:underline" target="_blank" rel=" noopener">information</a> returns. In the case of stakers, airdrop beneficiaries, and fork members, perfect compliance is always better than perfect privacy.