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Comment by ilovecaching | Hacker News Reader

So under the current laws does a person only pay taxes when converting to and from fiat to crypto, or does it apply to crypto transactions of any kind?

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It applies if there are gains.

What's not clear if you have to report the value of the gain when you did your transaction, or the current value. Crypto prices change a lot

You report the value of the gain at time of taxable event. Trading crypto for other crypto, or fiat, or buying real goods with it.... are taxable events. The capital gain is the appreciation in value at time of transacting.

So if you hodl you are not (yet) taxable? Only when you convert btc back to usd and there is a gain?

When you convert BTC to anything and there is a gain, denominated in the currency you pay taxes in, so buying something for BTC, trading to other cryptos, trading for USD, trading for Euros, etc.

I believe this is where a lot of the confusion comes from. If you use Coinbase to directly trade crypto (e.g. BTC for ETH) this is a taxable event on your BTC even though you never touch fiat in the process.

And that's quite logical if you think about it. How else can you explain the amount of your gains/losses when trading crypto for crypto and then back to fiat again.

Didn't this recently change? Prior to 2018 was it not considered a "like for like" transaction?

> Prior to 2018 was it not considered a "like for like" transaction?

It's "far from certain" [1]. Tax diligence is part of investing; these questions should be approached before one trades an asset, not after.

[1] https://www.coindesk.com/owe-irs-crypto-crypto-trades

Only against the advice of most accountants. Exchanges between different grades of the same precious metal aren't considered like kind transactions, so it seems pretty unlikely this "trick" would work for crypto.

Applies to crypto transactions of any kind. This is a major impediment to use of crypto for its intended purpose, and there are bills currently proposed in Congress to reverse this.

> to use of crypto for its intended purpose

Its intended purpose is debatable. Certainly this is an impediment to using it as a currency, or day to day spending money vs long term store of value, like gold, which also requires paying capital gains taxes.

At least, if I understood correctly the article, it's considered like stocks. What's the law on that?

That you pay taxes on capital gains. There are also taxes on dividend income in the case of stocks.

The law on stocks is that if you'd barter one stock for another, then that's a taxable event and you'd have to declare capital gains on the stock you traded away - which is the same for a BTC->ETH trade.

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