Bitcoin/Cryptocurrency/Like Kind Exchange

[mario100]

I'm trying to determine if 1031 like-kind exchange can be applied toward bitcoin/cryptocurrency. What i'm finding is that the IRS does look at bitcoin/cryptocurrency is like property, and I believe 1031 could apply, but cannot find anything that truly supports this. Also, I'm finding out that the new tax cut just signed, would make 1031 only for real-estate property, but until the new regs and terminology comes out, nothing is known for sure.

Is there anything out there that can help with a better understand for 1031 towards bitcoin/crypto currency? Appreciate any help.

Thank you!

[TaxGuyBill]

It seems like it falls into an unknown "gray area", with no definition guidance. From what I've read, it seems like more tax experts lean towards "no, it does not qualify" (Bitcoin for a different Crytocurrency). But again, it seems like there is no official guidance.

However, it certainly does not qualify starting in 2018, regardless of what Regulations come out. As you pointed out, the Tax Code was changed so that 1031 Exchanges will only apply to Real Property.

[nwtaxlady]

Capital Gain treatment or Self Employment... if...

I just went to a tax seminar on this. The speaker started from the very beginning and explained what bitcoin and cryptocurrency and blockchain is all about.

You need to ask if you client is a "Miner" then I believe they have self employment income.

Otherwise it is treated as capital gain.