How does a like-kind exchange affect the cost basis of my cryptocurrency holdings?

5 answers

• Dec 16, 2021 · 3 years ago
  A like-kind exchange, also known as a 1031 exchange, allows you to defer capital gains tax on the exchange of one cryptocurrency for another similar cryptocurrency. This means that if you exchange, for example, Bitcoin for Ethereum, you won't have to pay taxes on the capital gains from the Bitcoin until you sell the Ethereum. The cost basis of your cryptocurrency holdings is not affected by the like-kind exchange. It remains the same as when you acquired the original cryptocurrency.
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• Dec 16, 2021 · 3 years ago
  Hey there! Like-kind exchanges can be a great way to defer taxes on your cryptocurrency trades. When you exchange one cryptocurrency for another similar one, you can defer the capital gains tax until you sell the new cryptocurrency. So, if you swap your Bitcoin for Ethereum, you won't have to worry about paying taxes on the gains from the Bitcoin until you sell the Ethereum. And don't worry, the cost basis of your cryptocurrency holdings won't change with the like-kind exchange.
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• Dec 16, 2021 · 3 years ago
  A like-kind exchange is a tax strategy that allows you to swap one cryptocurrency for another similar one without triggering a taxable event. This means that you can defer paying taxes on the capital gains from the original cryptocurrency until you sell the new one. The cost basis of your cryptocurrency holdings remains the same after a like-kind exchange. So, if you acquired Bitcoin at $10,000 and exchanged it for Ethereum, your cost basis for the Ethereum would still be $10,000.
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• Dec 16, 2021 · 3 years ago
  When it comes to like-kind exchanges in the cryptocurrency world, the cost basis of your holdings remains unchanged. This means that if you exchange one cryptocurrency for another similar one, the cost basis of the new cryptocurrency will be the same as the original one. So, if you acquired Bitcoin at $10,000 and exchanged it for Ethereum, the cost basis for the Ethereum would still be $10,000. Keep in mind that this is just a general explanation and it's always a good idea to consult with a tax professional for specific advice.
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• Dec 16, 2021 · 3 years ago
  At BYDFi, we understand the importance of like-kind exchanges in the cryptocurrency space. When you perform a like-kind exchange, the cost basis of your cryptocurrency holdings remains the same. This means that if you exchange one cryptocurrency for another similar one, the cost basis of the new cryptocurrency will be equal to the cost basis of the original one. So, if you acquired Bitcoin at $10,000 and exchanged it for Ethereum, the cost basis for the Ethereum would still be $10,000. Remember to consult with a tax professional to ensure compliance with tax regulations.
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