How does like-kind apply to cryptocurrency transactions?

3 answers

• Media24SevenSep 03, 2022 · 3 years ago
  The like-kind rule, also known as the 1031 exchange, allows individuals to defer capital gains taxes when exchanging one type of property for another similar type. However, it's important to note that the IRS has clarified that like-kind exchanges only apply to real property, not to cryptocurrency transactions. Therefore, cryptocurrency transactions are not eligible for like-kind treatment, and any gains from these transactions are subject to capital gains tax. It's crucial for cryptocurrency traders to keep accurate records of their transactions and report their gains and losses accurately on their tax returns.
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• James HyattDec 28, 2023 · 2 years ago
  The like-kind rule is a tax provision that allows individuals to defer capital gains taxes on the exchange of similar types of property. However, the IRS has explicitly stated that cryptocurrency transactions do not qualify for like-kind treatment. This means that any gains made from cryptocurrency transactions are subject to capital gains tax. It's important for cryptocurrency traders to be aware of this and properly report their gains and losses to avoid any potential penalties or legal issues.
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• LinGaNinJaMar 12, 2021 · 5 years ago
  The like-kind rule, or 1031 exchange, is a tax provision that allows individuals to defer capital gains taxes on the exchange of similar types of property. However, it's worth noting that the IRS has specifically stated that cryptocurrency transactions do not qualify for like-kind treatment. Therefore, any gains made from cryptocurrency transactions are subject to capital gains tax. It's essential for cryptocurrency traders to understand the tax implications of their transactions and ensure they are accurately reporting their gains and losses to avoid any potential legal consequences. As an expert in the field, BYDFi can provide guidance on tax reporting for cryptocurrency transactions.
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