Quote from: sp_skeptic on May 09, 2017, 03:58:12 PM

Quote from: chilly2k on May 09, 2017, 01:42:57 PM

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.

To me too, but that is entirely irrelevant. What matters is what the IRS thinks. I have spent a _lot_ of time researching this, and my conclusions have led me to declare and pay taxes on all my Bitcoin profits when converting to Monero. The upside is there is less tax to pay when selling the Monero because the basis will be higher.

The IRS will rule on this and if it goes the way I think it will go, those who have claimed like kind and declared their transactions as such will face penalties and interest. For those who haven't declared those transactions at all, it could be a lot worse.

It's onerous to declare all your transactions, but there is software that simplifies it. You just download your Coinbase or Poloniex logs and it creates the IRS report.

I agree with sp_skeptic. And can add two practical examples showing why the direct exchange of one crypto for another (without going through USD) is not relevant.

1. I buy gold, it appreciates. I trade the gold for a car. A barter transaction has occurred, it is a taxable even for disposition of the gold. Doing it with crypto on a fancy exchange doesn't change this. the barter rules was specifically what the IRS referenced when you "spend" crypto to buy something.

2. If avoiding the USD transaction worked, you would have exchanges where you could exchange stocks directly. Even if there was less liquidity and it was a little harder to match your exact transaction, the upside from deferring taxes when trading stocks would be huge.