US Congress will vote this week on a tax bill (pg. 762) likely to affect investment gains made in cryptocurrencies. One of the proposed changes would limit like-kind exchanges to real estate. The move closes a loophole which some argue allows crypto investors to pay a lower rate on income. Exchanging gains made in BTC, for example to another crypto would be subject to capital gains tax. Investors generating income from cryptocurrency sales would also have to declare it. As Bitcoin and other cryptocurrencies gain value — and attention– how to tax it remains a hot topic.
One open question is whether investors can delay paying taxes on capital gains by using one digital asset to buy another. Even though the IRS views cryptocurrency as property, the answer is likely no.
Under current rules, a 1031 like-kind exchange allows taxpayers to swap one asset for a similar asset as long as it’s for business or investment purposes. Taxpayers typically use form 1031 for exchanges of similar real-estate, or livestock — delaying capital gains taxes.
More: https://dowbit.com/gop-tax-bill-charge-capital-gains/
Topic: [2017-12-18] GOP Tax Plan TO Charge Capital Gains on Cryptocurrency Income (Read 89 times)
December 18, 2017, 09:02:49 AM
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