Like-Kind Exchange
A US tax provision allowing certain asset swaps to defer capital gains tax, historically debated for crypto-to-crypto trades before 2018.
A like-kind exchange is a US tax provision (Internal Revenue Code Section 1031) that allows certain swaps of similar property to defer recognizing a capital gain for tax purposes, rather than treating the swap as an immediate taxable disposal.
Before 2018, some argued crypto-to-crypto trades could potentially qualify as like-kind exchanges; the 2017 US Tax Cuts and Jobs Act explicitly limited Section 1031 to real property starting in 2018, closing off that argument going forward. This is a US-specific, historical point, not a general or currently-available treatment — see Kaavon's "Crypto Cost Basis and Accounting Methods" guide and the relevant country-specific tax guide for current rules.
Examples
- Prior to 2018, some US taxpayers argued crypto-to-crypto trades qualified for like-kind exchange tax deferral; this argument no longer applies under current law.
- Like-kind exchange treatment is a US-specific tax concept, not a universal or currently-available crypto tax strategy.