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Comment by chatmasta | Hacker News Reader

It’s pretty crazy that we’ve even gotten to the point where there is an FAQ about “hard forks” on the IRS website.

You have to give the US government a certain amount of kudos for how it’s handled cryptocurrency so far; it’s been far from perfect, but you can tell they are trying to be accommodating and employ common sense.

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I think the tax treatment of cryptocurrency is nonsensical if one views and attempts to use it as a currency rather than an investment. There is no exclusion of small transactions from capital gains reporting requirements like there is for foreign fiat currencies. That means that actual currency users must track and report cost basis and gains on every single transaction, no matter how small, in order to remain in compliance. This tax treatment is overly burdensome and stifles legal cryptocurrency usage and adoption in the US.

Keep in mind that if you swap houses that you bought as an investment, there is still the possibility of a tax liability. Barter is not excluded from taxation.

The first $250-500k of capital gains on houses is tax-free when you sell your house. I would argue that the IRS should treat cryptocurrency like other foreign currencies where the first $200 of capital gains is not taxed: https://www.irs.gov/publications/p525#en_US_2018_publink1000...

That would just put cryptocurrency on similar footing as any other currency.

It would be considered a 1031 Like-Kind exchange though.

Take a look at how fishing works -- it's also got tons of weird nuance about who get what and how to tax it. We techies sometimes forget that other aspects of life are complicated.

It fits pretty well with how the IRS operates. They don't seem to care how money is made - as long as they get their share.

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