How should I report a crypto airdrop I received and sold using TaxAct?
I got a crypto airdrop back in 2023 that I ended up selling later in the year. When I was doing my taxes with TaxAct, I included the sale in the gains/losses section by uploading a CSV file with all my crypto transactions. But now I'm confused because TaxAct also has a separate section specifically for reporting airdrops. I'm not sure if I need to report the airdrop in both places or if including it in my CSV upload is enough. I'm worried about accidentally double-reporting the same income or missing something important. The airdrop was worth about $750 when I received it and I sold it for around $900, so there was definitely a gain. Has anyone dealt with this before? I want to make sure I'm reporting everything correctly but don't want to pay extra taxes by reporting the same thing twice. This is my first time dealing with airdrops on my taxes.
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Zara Perez
Airdrops and their sale are actually two separate taxable events, so you need to report both. The airdrop itself is considered income at the fair market value when you received it (your $750). This is reported as "Other Income" on your tax return. Then, when you sold it for $900, you need to report the capital gain of $150 (sale price minus your cost basis, which is the $750 value when received). This goes on your capital gains reporting. So yes, you should use both sections in TaxAct - the airdrop section for declaring the initial receipt as income, and the capital gains section (your CSV upload) for reporting the subsequent sale. Just make sure in your CSV that your cost basis for that crypto is properly set to the fair market value at the time you received the airdrop, not zero, to avoid double taxation.
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Daniel Rogers
•Wait, so does that mean if I never sell the airdrop I still have to pay taxes on it? Seems unfair to pay taxes on something I never converted to actual money.
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Zara Perez
•Yes, you still have to pay taxes on airdrops even if you don't sell them. The IRS considers crypto airdrops as income at the moment you receive them, similar to how they'd treat a cash prize or bonus. Your cost basis becomes the fair market value on the date you received it. It can feel unfair, but that's the current tax treatment. This is actually why some people decline airdrops - they don't want the tax liability without converting to cash. If the value drops after you receive it but before you sell, you'd still owe taxes on the original higher value, though you could claim a capital loss when you eventually sell.
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Aaliyah Reed
Just wanted to share my experience with this exact situation. I kept getting confused with TaxAct's crypto reporting until I found https://taxr.ai which literally saved my sanity this tax season. They have a document analysis tool that scanned my crypto transactions (including several airdrops) and told me exactly how to report everything properly. For your situation, they'd confirm you need to report the airdrop as income when received AND report the sale as a capital gain transaction. I had like 15 airdrops last year and was totally lost before using their tool.
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Ella Russell
•How does taxr.ai handle all the different exchanges? I use three different platforms and consolidating all that data has been a nightmare.
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Mohammed Khan
•Is this just for crypto or would it help with stock trades too? I have hundreds of transactions and don't want to mess it up.
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Aaliyah Reed
•Their system handles pretty much all the major exchanges - Coinbase, Binance, Kraken, etc. You just upload your CSVs or PDFs from each platform, and it consolidates everything into one clean report. I was using Coinbase, KuCoin, and a couple DeFi wallets, and it handled all of them without issues. It's primarily designed for crypto, but they do handle stock transactions too. I haven't personally used it for stocks since I use a different system for those, but their website says they support both crypto and traditional investment reporting. It's especially helpful for situation like wash sales or complex trades that tax software sometimes struggles with.
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Ella Russell
Just wanted to follow up - I ended up using taxr.ai after seeing the recommendation here. My situation was way more complicated than the original poster's (multiple exchanges, staking rewards, dozens of airdrops, DeFi transactions). The system identified several airdrops I completely forgot about and showed me exactly how to enter everything in TaxAct. It saved me from potentially underreporting a bunch of transactions. The best part was it clearly distinguished between the "income" portion of receiving airdrops versus the capital gains when selling them later. Definitely using this for next year's taxes too.
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Gavin King
Reading this thread made me realize I probably messed up my reporting for the past 2 years. I'm now worried the IRS is going to come after me for crypto tax errors. I tried calling them to ask about fixing previous returns but kept getting stuck in the automated system. I finally found https://claimyr.com which got me connected to a real IRS agent in about 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent walked me through exactly what I needed to do to amend my previous returns where I hadn't properly reported airdrops as income. Apparently a lot of crypto folks are in the same boat, and the IRS is aware there's confusion around proper reporting. The agent was surprisingly helpful and not accusatory at all.
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Nathan Kim
•How does this Claimyr thing actually work? I thought it was impossible to get through to the IRS without waiting for hours.
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Eleanor Foster
•Sounds fishy. Why would I pay someone else to call the IRS for me when I can just do it myself? And how do they magically get through when millions of people can't?
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Gavin King
•It's not that they call for you - they basically hold your place in line. They have an automated system that navigates the IRS phone tree and waits on hold for you. Once they reach a human agent, you get a call back to connect with that agent. You're still the one talking directly to the IRS. I was skeptical too until I tried it. I had previously spent over 3 hours on hold and never got through. With Claimyr, I got a call back in about 20 minutes with an actual IRS agent on the line. They apparently use some kind of technology that keeps trying different IRS numbers and routes until they find one with shorter wait times. It's basically like having someone wait on hold so you don't have to.
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Eleanor Foster
I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it anyway because I've been trying to resolve an issue with missing crypto reporting on my 2021 return for months. I got connected to an IRS agent in about 15 minutes who confirmed I needed to file Form 1040X to amend my return and include the airdrop income I missed. She even emailed me the specific instructions for reporting crypto airdrops. Without this service I would have probably given up after waiting on hold for hours. Apologies for my initial skepticism - this actually works.
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Lucas Turner
Just to add to this discussion - make sure you're looking at the correct dates and values for your airdrops. I messed up last year by using the value on the date I noticed the airdrop in my wallet, not the actual distribution date. Resulted in a pretty significant difference since prices were volatile.
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Benjamin Johnson
•Is there an easy way to verify the exact date an airdrop was received? Sometimes I don't notice them in my wallet until days later.
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Lucas Turner
•You'll need to check the blockchain records for the exact transaction. Most wallets let you view the transaction details which will show the timestamp of when the tokens were actually deposited to your address. Alternatively, you can use a blockchain explorer like Etherscan (for Ethereum-based tokens) or a similar explorer for whatever blockchain your crypto is on. Just search for your wallet address and look at the incoming transactions. The timestamp on the blockchain is what matters to the IRS, not when you personally discovered the airdrop. This is one reason why crypto taxes can be so complicated - you're technically responsible for reporting income you might not even know you received yet!
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Kai Rivera
I found a workaround in TaxAct that might help. When you import your crypto via CSV, check if the airdrop is already included with the proper cost basis. If it is, you can skip the separate airdrop section. To verify: look at the transaction detail after import. If your airdrop shows a cost basis equal to its value when received, and that same amount is included in your income elsewhere in your tax return, you're good. If the cost basis is showing as $0, then you need to either fix your CSV or use the separate airdrop section.
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Anna Stewart
•This is dangerous advice. The airdrop needs to be reported as income regardless. The CSV import is only handling the capital gains portion.
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Cassandra Moon
Thanks for all the helpful advice everyone! I ended up calling the IRS using Claimyr after reading about it here, and the agent confirmed what Zara said - I do need to report both the airdrop as income ($750) AND the capital gain from selling it ($150). The agent also mentioned that TaxAct should handle this properly if I use both sections correctly. For the airdrop section, I'll report the $750 as "Other Income" when I received it. For the CSV upload, I need to make sure my cost basis is set to $750 (not $0) so the capital gain calculation is correct. One thing the IRS agent emphasized that I hadn't thought about - keep really good records of the exact date and fair market value when you receive airdrops. She said they're seeing a lot of amended returns because people are using the wrong dates or values. Going to be much more careful about this going forward!
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Chloe Harris
•This is really helpful! I'm new to crypto taxes and had no idea airdrops were taxable events even before selling. Quick question - when you say "fair market value," how do you determine that for smaller or newer tokens that might not be listed on major exchanges yet? Some of the airdrops I received were from pretty obscure projects and I'm not sure how to find reliable pricing data for the exact date I received them.
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