Overview
The National Journal quoted Lisa Zarlenga in a January 8 article titled “After Tax Overhaul, Questions Remain on Bitcoin Rules.” The article states that the tax-overhaul bill made only one significant change to the way digital currencies such as Bitcoin are taxed.
Ms. Zarlenga says that while the GOP tax law does not have any provisions that explicitly target digital currencies, the language does affect whether one type of transaction creates a taxable event. Previously, digital-currency holders could trade different varieties of currencies—such as Bitcoin for another cryptocurrency, like Ethereum—and defer capital-gains tax on the appreciating value. It’s known as a like-kind exchange, a transaction more commonly associated with fine art, racehorses, and mansions. Ms. Zarlenga adds, “What the bill does, though, is it takes away even that argument because like-kind exchanges now only apply to real estate.”
The full article can be read at the National Journal (subscription required).