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What is an airdrop?
An airdrop is a distribution of tokens to many wallet addresses at once, usually free. Projects use airdrops to spread a new token, and a hard fork can produce one when holders of the old coin receive the new one.
What it means for you
In the US, the IRS treats airdropped crypto as taxable income once you can sell or move it, at its value then; that value becomes your cost basis. Tokens that appear unasked in your wallet can be bait, and a site asking you to connect or sign to claim them can drain it.
A common mistake: “Free airdropped tokens are not taxed until I sell them.”
In fact: In the US, the IRS treats crypto received in an airdrop after a hard fork as ordinary income when it is recorded on the ledger and under your control. That value becomes your basis for any later sale.
How it works
The issuer picks the recipients and terms: for example, every wallet holding another specified token, users of an app who meet activity criteria, or people who used a test version before launch. The US SEC's March 2026 interpretation says an airdrop of a non-security token to recipients who give nothing in exchange does not create an investment contract, because no money is invested. For US tax, the IRS treats tokens received in an airdrop after a hard fork as ordinary income at fair market value when recorded on the ledger, if you have dominion and control.
Sources: IRS: Frequently asked questions on virtual currency transactions, SEC: Application of the Federal Securities Laws to Certain Types of Crypto Assets (Mar. 17, 2026) · checked 4 October 2026
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