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Mini data sheet on tax implications for cryptocurrency trading in the United States
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Robin
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Post: #51
RE: Mini data sheet on tax implications for cryptocurrency trading in the United States
(04-02-2018 04:27 PM)Lampwick Wrote:  
(04-02-2018 01:57 PM)Isaac Jordan Wrote:  Quick update: unfortunately the new 2018 tax bill explicitly limits 1031 exchanges to real estate transactions, meaning all crypto-to-crypto trades from Jan 1, 2018 going forward will be considered taxable events.

Crypto-to-crypto trades have effectively always been taxable events. As Plus Oultre pointed out, it is highly unlikely that crypto-to-crypto trades would ever qualify for 1031 treatment. It's wishful thinking. If someone made serious money in crypto and tries this, he is basically sending an invitation to the IRS to come fuck him up. The IRS will wait multiple years to retroactively audit tax returns, so as to maximize penalties and interest.

Quote:If you do insist on trading, I would again recommend cointracking.info. I've been using it for almost a year now and it has proved invaluable come tax time (not to mention having access to all sorts of other data).

I have found cointracking.info useful as a tool to aggregate and normalize trades from multiple exchanges. But their methodology for calculating realized gains and taxes on crypto-to-crypto trades is flawed. Bitcoin.tax appears to do the calculations correctly. I can explain further if desired, but I don't want to derail the thread.

This is a very good advice and I would advise anyone who used Section 1031 to defer taxes on crypto exchanges to go and amend their previous tax returns. You are basically begging IRS to come after you. Here is what IRS guidance states;

Quote:Finally, certain types of property are specifically excluded from Section 1031 treatment. Section 1031 does not apply to exchanges of:

Inventory or stock in trade
Stocks, bonds, or notes
Other securities or debt
Partnership interests
Certificates of trust

Cryptoassests fall into other securities category. The following article will help you to figure out some strategies and is very informative:

https://www.coindesk.com/active-crypto-t...-us-taxes/
04-03-2018 01:08 AM
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