Lake Tahoe Property Sells for $1.6M in Bitcoins

This needs a (2014). "$1.6M in Bitcoins" was 7400 BTC.

Around $300 million now.

In the UK we have to pay Capital Gains Tax whenever converting from crypto -> fiat or even crypto-> crypto, assuming the value of the crypto has increased from when you bought it.

I wonder if this problem goes away if you buy something direct with Bitcoin?

It does not. Bitcoin is a commodity, not a currency, so you have to pay capital gains on any appreciation that you realize.

Active traders of Bitcoin have to track the bases of their lots so that they can pay taxes on each sale.

How would you handle escrow for that?

As hinted at in the article -- via a bitcoin exchange. BitPay in this case. BitPay is unlikely to be a title agency, so likely no title insurance. I guess this kind of transaction can make sense if it's difficult for the buyer to change BTC for USD -- KYC and all that. For a $1.6M property I don't really see the point.

The same way an all cash transaction would be handled, I imagine.

In this instance, Martis Camp used BitPay and received USD in their bank.

Bet they wished that they kept the 7400 BTC instead.