Questions regarding bitcoin to the crypto trades

[Ray1]

Hi, regarding bitcoin to the crypto trades. 

1- Do we consider those as like-exchange? 

2- Should I do 1st-in 1st-out or Highest-Price First-Out works for 2017? 

3- What about 2018? 

4- Should the money leave the exchange for the trade to become taxable event?

[DianeW · Accepted solution]

Every transaction of sale is required to be reported as taxable income or loss on your tax return.  Cryptocurrency trades are not eligible for like-kind exchanges. 

Every sale is considered first in first out method unless you specifically state which bitcoin purchase is sold based on purchase date.

The procedure will remain the same for 2018 unless new legislation would apply.  Currently there is no information about changes for this procedure.

No, the money does not have to leave the exchange before it's a taxable event.  It would be like buying stock, selling it and leaving the money in your account such as Charles Schwab; or reinvesting dividends.  This is taxable income regardless if you take the money or leave it sitting there or reinvest it.

For more information on bitcoin transactions review below.

https://ttlc.intuit.com/replies/6442588

[spenny1]

Hi Diane is HIFO still ok if you break down sales? HIFO creates a much lower tax liability than FIFO for me for 2018. so does "average cost". In 2017 FIFO is better but if i need to be consistent there is so much more tax in 2018 i would do whatever is best for 18. i do also have standard stock sale cap gains in 2018 from a 1099-B which I assume were calculate with FIFO....