What is a crypto like-kind exchange?

Crypto like-kind exchanges enable investors to defer capital gains taxes on crypto-to-crypto transactions. While the 2017 Tax Cuts and Jobs Act restricted like-kind exchanges to real estate, transactions before 2018 could still be eligible for like-kind exchange status, which can significantly lower your tax bill, depending on your circumstances.

Do cryptocurrencies qualify as like-kind exchanges under 1031?

In a recent Chief Council Advisory, the IRS found that certain cryptocurrencies did not qualify as like-kind exchanges under section 1031 prior to the Tax Cuts & Jobs Act of 2017. The IRS’s ruling, while limited to coin exchanges involving Bitcoin, Ether, or Litecoin, provides insight on the IRS’s current thinking on the subject.

Can a crypto-to-crypto trade be treated as a like-kind exchange?

Truth #6: Crypto-to-crypto trades occurring after 12/31/2017 cannot be treated as like-kind exchanges As part of the Tax Cuts and Jobs Act passed at the end of 2017, Section 1031 was amended to make like-kind exchanges only applicable to real estate transactions.