IRS CCA: Cryptocurrency Different-Type Exchanges Before 2018 Not Like-Kind for Purposes of Gain or – Bloomberg Tax

If completed before January 1, 2018, an exchange of (1) Bitcoin for Ether, (2) Bitcoin for Litecoin, or (3) Ether for Litecoin does not qualify as a like-kind exchange under tax code Section 1031, the Chief Counsel’s Office advised. While Bitcoin and Ether share similar qualities and uses in making payments, the latter has an additional functionality (as a platform for operating smart contracts and other applications) that differentiates it from the former, and, during 2016 and 2017, both acted as an on- and off-ramp for investments and transactions in other cryptocurrencies (such as Litecoin), thus making them …