Unfortunately, most governments haven’t specified exactly how taxes should be calculated. The IRS has been somewhat quiet on one very critical aspect of calculating taxes, are taxes due on crypto-to-crypto trades. Many US accountants and tax lawyers have taken the opinion that 1031 exchanges for tax years 2017 and prior are acceptable. Hence, no taxes are due on crypto-to crypto trades. Others, however, have stated that 1031 exchanges aren’t applicable as most cryptocurrencies aren’t “like asset” swaps. Some examples I’ve read are, Bitcoin is technically not the same as 0x. Hence, it wouldn’t qualify as a 1031 exchange. However, would Litecoin be an asset similar to Bitcoin because from a technical perspective, they are both similar in how they work. Hence, can a 1031 can be applicable?
Other governments, like India, are even further behind in putting out circulars on how cryptocurrencies should be treated from a tax perspective. At our BlockHack event in New Delhi in December 2017, we had a chance to hear many opinions on how taxes can be handled. Watch the video below for some opinions on crypto taxes in India.