To summarize the tax rules for cryptocurrency in the United States, cryptocurrency is an investment property and you owe taxes when you sell, trade, or use it.
This section focuses on taxes, rules, and regulations regarding cryptocurrency.
In Forex trading (foreign currency trading) there is a “first in first out” (FIFO) rule. This rule should be optional cryptocurrency.
In general, one might want to assume the rules of “like-kind property” or “like-kind 1031 exchange” do not apply to cryptocurrency.
For tax purposes, in the U.S., cryptocurrency is generally treated as property (a capital asset like stocks, bonds, and other investment properties). It is not treated as currency like the U.S. dollar.
Bitcoin is legal in the US, but it’s legality can be fuzzy in different parts of the world.