IRS: ‘Like-Kind’ Tax Exemption Does Not Apply to Pre-2018 Crypto Trades
An official for the U.S. Internal Revenue Service (IRS) has clarified that ‘like-kind’ tax exemptions do not apply to crypto exchanges or trades made before the 2017 tax law’s enactment.
According to a report by Bloomberg Tax on Nov. 13, taxpayers will not be able to defer taxes on exchanges of cryptocurrency, even those occurring before 2018. While the current tax law states that investors cannot use like-kind exchanges for crypto trades following the law’s enactment in 2017, it was unclear how the regulation applied to trades made prior to the overhaul.
Like-kind exchanges are a way for taxpayers to defer paying taxes on the gain of a sale, such as cryptoassets, by re-investing the proceeds into a similar property.