Receiving cryptocurrency as a gift generally does not trigger a taxable event at the time of receipt.
However, if you later sell or trade the gifted crypto, you must report the gain or loss based on the original cost basis of the donor and their holding period. If the donor didn’t provide the cost basis, you may need to use the fair market value at the time you received it.
On the other hand, airdrops are considered taxable income at the fair market value on the day you receive them. Whether the airdrop was expected or unsolicited, the IRS treats it as ordinary income, and it must be included in your gross income for the year.
Proper documentation is key. Always record the details of any crypto received through gifts or airdrops to ensure accurate tax reporting and avoid surprises at tax time.
Read also: The Ultimate Crypto Tax Guide
