How Does a Fork or Airdrop of the Underlying Cryptocurrency Affect the Derivative’s Tax Basis?

A fork or airdrop of the underlying cryptocurrency generally does not directly affect the tax basis of an existing derivative contract. The derivative contract's value is based on its terms and the market price of the underlying asset.

However, the receipt of the new cryptocurrency from a fork or airdrop is a separate taxable event for the holder of the underlying crypto, typically resulting in ordinary income equal to the fair market value at the time of receipt.