Quote from: sp_skeptic on May 09, 2017, 11:47:55 AM

Quote from: Zegra on May 09, 2017, 11:00:37 AM

I wouldn't. Of course, in my country cryptocurrency profits are for free because the high court of the EU declared cryptos as a currency (if you go on holidays outside of the eurozone, you don't pay taxes either for the foreign fiat currency you buy right?)
If the situation is different in your country, I'd argue that they aren't realized profits yet until you convert to fiat? You could still lose it all (from their perspective) so would be useless to pay taxes on income you never realized right?
But I'm not a lawyer.

In the US this is kind of a grey area. The question is whether exchanging one crypto for another is a "like kind" transaction. If you sell one pasture and buy another that is considered a like kind transaction and you don't have to pay taxes, you just carry the basis forward. But if you sell one stock and buy another that is specifically not considered like kind and you have to pay taxes.

The IRS hasn't ruled on crypto as like kind or not, but most people who have looked into it, including myself, think it's not. So if you sell appreciated Bitcoin to buy Monero you have to pay taxes on your gain in Bitcoin. Even if you decide to claim like kind on crypto transactions you have to report the transaction to the IRS, so they will know who to come after when they finally make a ruling.

The one thing you do not want to do is fail to declare your crypto transactions to the IRS. They WILL find you.

   I'm not a tax expert, but I've dealt with this for many years. and of course this is US only... The "like kind" transactions your referring to generally apply to real estate, and for that "like kind" means any Real Estate. You could sell your pasture and buy a parking lot, and it's still "like kind". There are many rules involved and it's not as easy as just saying you sold and bought. Although you do sell to USD and buy with USD. It's considered a trade.

   Your analogy with stocks is not a very good example. "But if you sell one stock and buy another that is specifically not considered like kind and you have to pay taxes." In this case you are selling stock A, and receiving USD, and then using USD's to buy stock B. In that case the gains you made on stock A have to be reported and taxes paid on them. Then Stock B's basis is whatever you bought it at.

   To me, bitcoin is very different. When you buy monero, your not selling bitcoin for USD, and then buying your monero with those USD's. Your trading your bitcoin for moneros. Your basis is whatever you paid for your bitcoin. and your profit/loss is whatever you made on the sale (either bitcoin or monero) back to USD.

  Again, all just my opinion.