tax-law cryptocurrency
Is there any doubt about crypto-currency and like-kind exchanges?
<p>If I sell crypto, can I purchase new crypto and avoid paying capital gains tax on it?</p>
<p><a href="https://www.irs.gov/businesses/small-businesses-self-employed/like-kind-exchanges-real-estate-tax-tips" rel="nofollow noreferrer">It seems the IRS is very clear about it,</a></p>
<blockquote>
<p>Under the Tax Cuts and Jobs Act, Section 1031 now applies only to exchanges of real property and not to exchanges of personal or intangible property. An exchange of real property held primarily for sale still does not qualify as a like-kind exchange. A transition rule in the new law provides that Section 1031 applies to a qualifying exchange of personal or intangible property if the taxpayer disposed of the exchanged property on or before December 31, 2017, or received replacement property on or before that date.</p>
</blockquote>
<p>Moreover, from <a href="https://www.law.cornell.edu/uscode/text/26/1031" rel="nofollow noreferrer">Section 1031</a> which <a href="https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section1031&amp;num=0&amp;edition=prelim#amendment-note" rel="nofollow noreferrer">was amended years ago in 2017</a> the amendment says:</p>
<blockquote>
<p>2017-Pub. L. 115–97, §13303(b)(5), substituted &quot;real property&quot; for &quot;property&quot; in section catchline.</p>
<p>Subsec. (a)(1). Pub. L. 115–97, §13303(a), substituted &quot;real property&quot; for &quot;property&quot; wherever appearing.</p>
<p>Subsec. (a)(2). Pub. L. 115–97, §13303(b)(1)(A), amended par. (2) generally. Prior to amendment, text read as follows: &quot;This subsection shall not apply to any exchange of-</p>
<ul>
<li><p>(A) stock in trade or other property held primarily for sale,</p>
</li>
<li><p>(B) stocks, bonds, or notes,</p>
</li>
<li><p>(C) other securities or evidences of indebtedness or interest,</p>
</li>
<li><p>(D) interests in a partnership,</p>
</li>
<li><p>(E) certificates of trust or beneficial interests, or</p>
</li>
<li><p>(F) choses in action.</p>
</li>
</ul>
</blockquote>
<p>But from what I'm being told by biased and reputable sources in the cryptocurrency exchanges, the IRS blogs are not legally binding and that for crypto to be taxed like property it <em>must</em> be subject to to Section 1031. Take a look at this <a href="https://www.forbes.com/sites/robertwood/2019/11/18/irs-kills-tax-free-crypto-exchanges-not-hardly/?sh=7780ccf157c3" rel="nofollow noreferrer">article on Forbes.com from 2019, <em>&quot;IRS Kills Tax Free Crypto Exchanges? Not Hardly&quot;</em></a> which says,</p>
<blockquote>
<p>Section 1031 provides that neither gain nor loss is recognized on an exchange of like-kind property</p>
</blockquote>
<p>This is simply untrue. It's not <em>like-kind property</em>, it's <em>like-kind <strong>real property</strong></em>, the article goes forward to talk about how it's not settled whether or not bitcoin is an exchange or not. But why would that question even matter? Does anyone dispute that it's <strong>not</strong> <em>&quot;real property&quot;</em> which seems to be <em>required</em> to qualify for 1031?</p>
<p>I'm just confused here, why is this even in dispute?</p>

<h2>“Real property” is land and things attached to land</h2>
<p>Everything else (including Bitcoin) is personal property.</p>
<p>Therefore, since the 2017 amendment, Bitcoin is not captured by the s1031 like-kind transfer exemption. However, the article you link to is discussing its treatment <em>before</em> the amendment.</p>
