Cryptocurrency Investors Lose Major Tax Break Under New U.S. Tax Code
The new U.S. tax code amends IRC Section 1031 (a)(1) regarding “like kind exchanges,” excluding all cryptocurrencies from a previous legal loophole and making all cryptocurrency trades a taxable event.
On Friday morning, U.S. President Donald Trump signed a new tax bill into law, signalling the first major tax overhaul in the U.S. in over 30 years. And while you may or may not have high praise for the bill, one thing is certain: the new tax code is bad news for cryptocurrency investors. Starting Jan. 1st, 2018, all cryptocurrency trades will be a taxable event, including swapping one cryptocurrency for another.
http://digitalmoneytimes.com/cryptocurrency-investors-lose-major-tax-break-under-new-u-s-tax-code/
"Death, Taxes, and Cryptocurrency
This change marks a significant blow for U.S. cryptocurrency investors. Although trades between fiat currency and crypto have previously been taxed, the vast majority of trading which occurs between separate cryptocurrencies has flown under the radar.
Although traders are expected to pay taxes once they “cash out” or trade their coins for goods and services, swapping between cryptocurrencies has allowed investors to defer their tax obligation for short-term capital gains. Now investors will no longer be able to avoid income tax on these trades without holding onto a specific cryptocurrency for over a year.
What remains to be seen is whether users will actually heed the law, as many U.S. investors already have an notoriously bad habit of avoiding taxes on their Bitcoin profits. From 2013 to 2015, the IRS discovered that fewer than 1,000 people in the U.S. had paid taxes on their bitcoins each year, prompting a controversial lawsuit against Coinbase, demanding they hand over all user transactions from those years.
Tensions with the IRS will likely only get worse next year should Bitcoin investors continue to shirk their tax obligations. Gains of nearly $ 14,000 in Bitcoin this year alone will likely spell billions of dollars of missed tax revenue for the IRS should Americans choose to cheat the taxman again next spring."
2018 is surely a year that will bring friction between the crypto world and the outdated regimes that shape the world the way they see fit.
The ever-hungry IRS monster looking to feed of a movement whose whole purpose is to be more efficient then the current system. The IRS doesn't see yet that cryptos main objective right now is to overthrow the system by getting accepted into the mainstream, simultaneously pushing out the current regime.