Taxing Blockchain Forks

27 Pages Posted: 8 Nov 2019

See all articles by Mattia Landoni

Mattia Landoni


Gina C. Pieters

University of Chicago - Department of Economics; Cambridge Centre for Alternative Finance

Date Written: October 25, 2019


The tax treatment of cryptocurrency forks presents four unique challenges: parent/child designation, taxpayer access to the new token, assessment of fair market value, and assessment of comparable contemporaneous fair market values. We provide empirical evidence that each of these issues is a hurdle in determining whether income has been realized, or in apportioning the basis. We consider three existing approaches for assets acquired without a purchase. We conclude that the least problematic approach (adopted by Japan) is giving zero tax basis to the new coin and taxing the proceeds upon a sale, while treating the new coin as realized income (as recently ruled in the US) is the most problematic.

Keywords: taxation, cryptocurrency, fork, split, blockchain, distributed ledger

JEL Classification: H20, H21, H24, H29

Suggested Citation

Landoni, Mattia and Pieters, Gina C., Taxing Blockchain Forks (October 25, 2019). SMU Cox School of Business Research Paper No. 19-18, Available at SSRN: or

Mattia Landoni

Independent ( email )

Gina C. Pieters (Contact Author)

University of Chicago - Department of Economics ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Cambridge Centre for Alternative Finance ( email )

10 Trumpington Street
Cambridge, CB21QA
United Kingdom

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