Do I have to report an airdrop I never asked for?
The starting point is that tokens received without consideration raise an income question at the moment they arrive, whether or not you wanted them. What makes unsolicited tokens different is that many have no market you could sell into, so the real issue is less whether to report and more what value to report. Work through the wallet token by token: separate those with an ascertainable value at receipt from those with none, and record the evidence for each. A short schedule with the reasoning written beside it turns an awkward wallet into a defensible position.
Is an airdrop taxed when it appears or when I claim it?
That is the timing question this term carries, and there is no single settled answer, so it should be documented rather than assumed. Allocation, appearance in a wallet, and a claim transaction you sign yourself can fall in different months or different years. Look at what you actually controlled at each stage; whether the tokens could be moved or sold before the claim usually drives the argument. Pick a position, write down the facts that support it, and use the same position for every airdrop rather than choosing whichever date suits the year.
How do I value an airdrop with no trading market?
If nothing trades, there may be no ascertainable value at receipt, and saying so with evidence is a position rather than a gap. Record what you looked for and when: whether any venue quoted the token, whether transfers were possible at all, and what the token fetched in any observable transaction. Keep the exports you relied on, because this is exactly the kind of fact nobody can reconstruct a year later. If a market appears afterwards, that bears on the later disposal rather than retrospectively on the receipt, and the schedule should show both dates.
What if airdropped tokens are worthless or cannot be sold?
Illiquid and worthless are different findings and should be recorded differently. A token you cannot move at all is a poor candidate for a receipt value; a token that trades thinly has a value that is merely hard to establish. Neither is a reason to leave the arrival out of the record. List the token, the date it appeared, what you found about its market and the conclusion you drew. If it is later abandoned or becomes tradeable, the same schedule carries that next event, which is what stops the history being rebuilt from memory.
Do airdrops need reporting in both countries I file in?
Each system applies its own rules to the same arrival, so both returns may have something to say about it, and they may not say it in the same year. Two separate questions arise. First, the income question: when each system treats the tokens as received, and at what value. Second, whether the holding itself falls inside either country's foreign asset reporting, which follows from where the platform or wallet arrangement sits and how the holding is characterised. Settle the characterisation once, in writing, and apply it to both returns rather than letting each adviser choose.
What cost base do I use when I sell airdropped tokens?
Whatever value you brought into income at receipt becomes the cost of those tokens, so a later sale is measured from that point rather than from nothing. Where the conclusion was that there was no ascertainable value on arrival, the cost is correspondingly low and the eventual disposal carries almost the whole movement, which is a consistent answer rather than a contradiction. What cannot work is reporting income on arrival and then computing the sale as though the tokens had cost nothing. Keep the arrival schedule and the disposal schedule together so each sale points back to its receipt.
Branch or subsidiary — which should we use to expand?
A branch keeps one taxpayer: results consolidate at home, losses are usable sooner, and the exposure is that the branch is a permanent establishment whose profit the host country taxes, sometimes with a branch tax on repatriation. A subsidiary is a separate taxpayer with limited liability and local rates, at the cost of withholding on dividends home and transfer pricing on everything between them. The deciding facts are usually expected losses, liability and exit plans. See branch against subsidiary.
Do I get credit for all of the foreign tax I paid?
Only up to your own country's tax on that same income, and only for tax you were legally obliged to pay. Two consequences follow. Living somewhere that taxes you more heavily than your residence country does leaves an excess that becomes a carryover rather than a refund. And withholding suffered above the treaty rate is not creditable — the route back to that money is a refund claim in the country that took it. See claiming the credit.
