The new U.S. tax code amends IRC Section 1031 (a)(1) regarding “like kind exchanges,” excluding all cryptocurrencies from a previous legal loophole and making all cryptocurrency trades a taxable event. On Friday morning, U.S. President Donald Trump signed a new tax bill into law, signalling the first major tax overhaul in the U.S. in over 30 years.
And while you may or may not have high praise for the bill, one thing is certain: the new tax code is bad news for cryptocurrency investors. Starting Jan.
1st, 2018, all cryptocurrency trades will be a taxable event, including swapping one cryptocurrency for another. The recent overhaul amends a part of the tax code regarding exemptions for “like kind exchanges,” allowing investors to swap similar assets without triggering a tax event.
These so-called “1031 exchanges” have long been used by traders to exchange property, such as art or real estate, without having to pay taxes on it. Since March 2014, the IRS has treated Bitcoin and other digital currencies as property for tax purposes. Read more from bitcoinist.com…
thumbnail courtesy of bitcoinist.com