Express
IRS Indicates That Exchanges Between Bitcoin, Ethereum And Litecoin Are not Eligible For The Like-Kind Exchange Treatment
Summary: The U.S. Internal Revenue Service (IRS) issued a memo on Friday clearly mentioned that transactions between Bitcoin, Litecoin, and Ethereum that occurred before January 1, 2018, are not like-kind exchanges, the reason is these tokens are not of the same kind in terms of the overall design, intended use, actual use, nature, and characteristics. The ...
The U.S. Internal Revenue Service (IRS) issued a memo on Friday clearly mentioned that transactions between Bitcoin, Litecoin, and Ethereum that occurred before January 1, 2018, are not like-kind exchanges, the reason is these tokens are not of the same kind in terms of the overall design, intended use, actual use, nature, and characteristics.
The IRS also stated that the recommendations given here are limited to transactions involving Bitcoin, Ethereum or Litecoin, and do not involve any other cryptocurrency, or any other transactions.
Like-Kind Exchanges means that if the investor completes the sale of the "original property" within a limited time and purchases the "like-kind property" in exchange (such as real estate replacement), then the investor does not need to pay tax in the current year for the appreciation of the sale of the "original property", and it is delayed until the sale of exchange-purchased "like-kind property".
This statement from the IRS means that if the analysis used in the memo is applied to other cryptocurrency transactions, almost all cryptocurrency-to-cryptocurrency transactions will be considered taxable events and investors will not be able to enjoy delayed tax payment.
By Mary Liu
Tags: Bitcoin,Ethereum,IRS,Litcoin,Tax
Link: IRS Indicates That Exchanges Between Bitcoin, Ethereum And Litecoin Are not Eligible For The Like-Kind Exchange Treatment [Copy]
