How to Handle Solana Airdrops on Your Taxes
Free tokens aren't actually free in the eyes of the IRS. Here's what you need to know about airdrop taxation — including the edge cases most guides skip.
Are Airdrops Taxable?
Yes. The IRS treats cryptocurrency airdrops as ordinary income, taxable at the fair market value of the tokens at the time you receive them. This position has been consistent in IRS guidance since Notice 2014-21 and was reinforced in subsequent FAQs.
A few things that catch people off guard:
- — You owe tax on airdrops even if you didn't ask for them. If tokens appear in your wallet, you have income at that moment.
- — The taxable event is receipt, not sale. You can't defer the income by simply holding the tokens.
- — Example: You receive 100 JUP in the Jupiter airdrop. JUP is trading at $0.80 when the tokens hit your wallet. You have $80 of ordinary income to report for that tax year — regardless of whether you ever sell.
- — That $80 also becomes your cost basis in those 100 JUP. If you later sell them for $120, you owe capital gains tax on the $40 gain, not the full $120.
How to Determine Fair Market Value
The IRS requires you to use the fair market value at the time of receipt. In practice, this means the spot price of the token when the airdrop transaction landed on-chain.
- ✓ For established tokens (SOL, JUP, BONK, etc.): Look up the historical price on CoinGecko, CoinMarketCap, or Birdeye using the date and approximate time of the airdrop. Use the closing price for that day if you can't get an exact time.
- ✓ For tokens listed on a DEX at the time: If the token had active trading on Raydium, Orca, or Jupiter at the moment of the airdrop, that market price is your FMV. Document the source and price you used.
- — For brand-new tokens with no price discovery: If a token was airdropped before any exchange listing and there was no established market, a reasonable argument can be made that the FMV was $0 at receipt. You would then owe capital gains tax on the full proceeds when you eventually sell. Document your reasoning carefully.
- — Useful tools: CoinGecko (historical OHLCV), Birdeye (Solana DEX history), Jupiter (price charts for SPL tokens).
# How to document your FMV determination:
Token: JUP (Jupiter)
Airdrop date: January 31, 2024
Amount: 1,000 JUP
FMV source: CoinGecko closing price
FMV at date: $0.81 per JUP
Total income: 1,000 x $0.81 = $810.00 ordinary income
Cost basis: $810.00 (used if/when sold)
Claiming vs. Receiving This distinction matters
Not all airdrops work the same way. The mechanics of delivery affect when the taxable event occurs.
- — Auto-deposited airdrops — tokens are sent directly to your wallet without any action on your part (common with Solana-native airdrops). These are taxable the moment they appear in your wallet, whether you noticed or not.
- — Claim-based airdrops — you must visit a website and sign a transaction to receive the tokens (common with EVM-style airdrop contracts). These are taxable when you claim them — not when you became eligible. If you were eligible in 2024 but claimed in 2025, it's 2025 income.
- ✓ If you never claim: Tokens you were eligible for but never claimed are generally not taxable. You didn't receive them, so you didn't receive income. There's no obligation to report phantom tokens sitting unclaimed in a smart contract.
- — The IRS has not issued specific guidance on the claiming distinction, but the general income recognition principle supports this interpretation: income is recognized when you have "dominion and control" over the property.
What About Worthless Airdrops? Spam tokens
Solana wallets frequently receive unsolicited spam tokens — random NFTs or SPL tokens sent to thousands of wallets as a marketing tactic or outright scam. The question of how to handle these is one of the most common airdrop tax questions.
- ✓ $0 FMV at receipt: If a token has no market, no liquidity, and no established price at the time it hits your wallet, you can reasonably argue its FMV is $0. Zero income to report.
- — Document your reasoning: Write a brief note: "Token X had no exchange listing, no DEX liquidity, and no established market on [date]. FMV determined to be $0." Keep this with your tax records.
- ! Future sale trap: If a $0-basis token later gains value and you sell it, the entire sale proceeds are taxable as capital gains. You can't retroactively assign a cost basis. This applies to tokens that seemed worthless but later mooned.
- — Interacting with scam tokens is dangerous: Some malicious tokens are designed so that attempting to swap or transfer them triggers approval of a drain contract. If a token appeared without you seeking it out, it's usually safest to leave it untouched.
- ✓ Closing token accounts: You can close empty or spam token accounts using Phantom or Solana's close-account instruction. This has no tax consequence if the tokens have $0 value — but document it anyway.
LanaTax categorizes airdrops separately in your transaction export. When you download your CSV, airdrop transactions are labeled with their own type — so you can easily identify them, group them by token, and calculate total airdrop income for the year without sifting through hundreds of rows manually.
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Disclaimer: This guide reflects current IRS guidance and general tax principles as of early 2026. Cryptocurrency tax rules are evolving — new regulations, court decisions, or IRS notices could change how airdrops are treated. The $0 FMV treatment for worthless tokens, the claiming vs. receipt distinction, and liquid staking treatment are all areas where guidance is incomplete. This is not legal or tax advice. Consult a qualified CPA or tax attorney who specializes in cryptocurrency before filing.