Today is October 25th, the official day of the Bitcoin Gold fork, whereby holders of Bitcoin are supposed to be credited with an equal amount of Bitcoin Gold (BTG). The actual ability to use/monetize this currency is in question, and also the U.S. tax result.
Is Bitcoin Gold Taxable in the U.S.?
The issue
Although the Bitcoin Gold fork has occurred, many prominent exchanges/wallets are not supporting the currency:
Coinbase will not support the Bitcoin Gold fork until if/when security of the blockchain is demonstrated.
Further, Satoshi labs (maker of Trezor wallet) and Bittrex exchange will keep track of users’ credit for Bitcoin Gold, but will not support the wallet (Bittrex won’t list the currency); each citing security concerns.
Issue 1 - Gross Income
The IRS general rule is income from whatever source derived is taxable gross income, unless there is a statutory exclusion. However, other than providing a short list of possible income inclusions, much of the elaboration is left to the U.S. courts. The Supreme Court in the U.S. has determined gross income includes any undeniable accession to wealth. The accession to wealth must be clearly realized and an economic benefit.
How is there an accession of wealth if the currency can’t be monetized?
Constructive Receipt
Thank you 
It could be called into question if constructive receipt has actually occurred for Bitcoin Gold if it is being held unavailable for use/credit. In the case of Bittrez/Trezor, the taxpayer is being credited the BTG with restrictions, that may be a hint there is technically a constructive receipt (although if this BTG not actually "property", then nothing is received, see Issue 2 below).
Issue 2 – Property
In defining whether crypto currency is property subject to tax, the IRS indicates the currency must be (1) tradeable between users and (2) can be exchanged for US dollars (or other currencies).
The significant reluctance in adoption by major exchanges could call into question whether BTG is actually a convertible virtual currency subject to taxation.
It is clear that the Bitcoin Gold exists, and some people have access and are trading it (some exchanges have credited it in the interim before the blockchain is live). But for those who choose to keep their BTC with Coinbase/Bittrex/Trezor, this could also constitute an abandonment of the rights for Bitcoin Gold. Therefore, any income could be offset by an abandonment loss. Abandonment would require a clear demonstrable intent. This is totally speculative and one of many scenarios, so don’t rely on it for your tax filing.
Issue 3 - Where/when does this Hard Fork fit in the Tax Code
Bitcoin Gold is not the first Bitcoin hard fork.
The prior fork occurred on August 1, 2017 where Bitcoin holders were credited with Bitcoin cash. I also wrote a detailed speculative article regarding Bitcoin Cash (BCH) speculating on the possible outcomes if Bitcoin Cash is truly property/income on August 1, 2017. It is unclear to me how cost basis is split between Bitcoin and forked currencies, if the income event truly occurs on the time of the fork, the time the currency becomes available for you to trade, or the time sold for USD/exchanged for Bitcoin. Discussion below:
Takeway
These are just a few of the many issues, as I have time to look more deeply, I will write a follow-up article. But unfortunately all paths are certainly uncertain! I can't form a concrete point of view today, but it burns on my mind and hopefully I will have more in time for the next hard fork.
What do you think about these issues? Are there any other issues you would like to see vetted, if so please let me know?
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Sources of Crypto News
https://cointelegraph.com/news/coinbase-hard-fork-plan-credits-2x-coins-shuns-bitcoin-gold
https://cointelegraph.com/news/bittrex-issues-official-statement-about-bitcoin-gold-warns-users
https://cointelegraph.com/news/trezor-issues-statement-about-bitcoin-gold-warns-of-unfinished-code
Disclaimer: This series contains general discussion of U.S. taxes in a developing and unclear area of tax law. As always, you should consult your own tax advisor in your jurisdiction to determine your specific situation as this is not personal advice; and consider any future guidance by the Congress/IRS after the date of this article. Under Circular 230 to the extent it applies, this article cannot be used or relied on to avoid any tax or penalties in the U.S., its States or any other jurisdictions.
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