Crypto and tax

[mocha245]

I have a question regarding tax reporting. Last year, aside from receiving an airdrop of crypto worth about $228 from an exchange, I had no other earned income. I've read that all crypto earnings need to be reported for taxes. Do I need to file this?

[TomK2023]

Yes.  Cryptocurrency airdrops are (usually) free distributions of coins or tokens into multiple wallet addresses to promote and drive adoption of a new virtual currency.

According to the IRS, airdrops (along with promos and staking rewards) only become taxable once the taxpayer acquires the ability to transfer, sell, exchange, or otherwise dispose of the cryptocurrency. Airdropped currency that isn't yet usable or accessible isn't taxable until the taxpayer can exercise control over it.

If you can access your crypto airdrop, follow these steps to report it in TurboTax.

 

Step 1 - Convert to USD

Step 2 - Enter in TurboTax

TurboTax FAQ: How do I report ac crypto airdrop?