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How does section 1031 like-kind exchanges affect the cost basis of my cryptocurrency holdings?

avatarkunnudadNov 26, 2021 · 3 years ago1 answers

Can you explain how section 1031 like-kind exchanges impact the cost basis of my cryptocurrency holdings?

How does section 1031 like-kind exchanges affect the cost basis of my cryptocurrency holdings?
Cryptocurrency
Section 1031
Like-kind Exchanges

1 answers

  • avatarNov 26, 2021 · 3 years ago
    Ah, section 1031 like-kind exchanges. They can definitely impact the cost basis of your cryptocurrency holdings. When you swap one cryptocurrency for another that is considered a like-kind exchange, the cost basis of the original cryptocurrency carries over to the new cryptocurrency. So, the price at which you acquired the original cryptocurrency becomes the cost basis for the new cryptocurrency. It's crucial to keep a record of the cost basis to properly calculate your capital gains or losses when you decide to sell or get rid of the cryptocurrency.

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