Any American 比特币 investors who were hoping to avoid paying taxes for their profits this year by trading them for altcoins are in for an unpleasant surprise. New regulations have been tailored specifically to make sure U.S. taxpayers can’t use this method to avoid giving the IRS their cut.
比特币 to Altcoin is Not a “Like Kind” Exchange
Until today a crafty tax attorney or accountant could have tried claiming that trading 比特币 for another cryptocurrency is not a taxable event, 但你.S. authorities are now moving in fast to plug this loophole. The latest tax bill contains clarifications which make this a non-valid tax-minimizing strategy going forward.
The issue arises from the IRS categorizing 比特币 as property, which can be argued makes crypto to crypto trades “like kind” exchanges under Section 1031 of the Internal Revenue Code. The new tax bill defines “like kind” exchanges to pertain only to real estate deals. To make things as clear as possible, this means that if you trade 比特币 for tether (USDT) for example, that is a taxable event.
“Some people think, ‘I’m taking my 比特币, which the IRS has deemed to be property, swapping it for another property and doing it for investment reasons,’ so it sounds like it could be a 1031 exchange,“埃文·福克斯, tax manager at New York accounting firm Berdon, 告诉 CNBC. “I think it’s a stretch.”
According to the current tax framework, Americans need to self report their 比特币 trading profits and calculate their dues according to their tax brackets. Selling after holding the asset for less than a year qualifies as a short term investment and is taxed between 10% to 39.6%. Selling 比特币 after holding for over a year is qualified as a long-term investment and taxed up to 20%. Conveniently, if you traded over $20,000 with Coinbase the IRS already has your records.