If I only exchange my crypto, but don’t cash it out, how is that taxed?

[Star168]

If I only exchange my crypto, but don’t cash it out, how is that taxed?

[RyanH5]

Hi Star168. Thank you for joining us today.

For tax purposes, exchanging one cryptocurrency for another is treated as two separate transactions.
The first is as if you converted it to US dollars at the fair market value at the time of conversion. This is treated as a sale and reported as a capital gain or loss.
The second, is the purchase of the new cryptocurrency. Your basis in it will also be the fair market value at the time of the conversion.

I hope this helps.