The thing that has changed under the new tax bill is “Like Kind Exchanges” are now specific to ONLY REAL PROPERTY. This deals with section 1031 of the IRS code.
… Sec. 13303 amends IRC Section 1031 (a)(1) to delete “property” and replace it with “real property” – see 1
The change goes into effect Jan 1 2018.
If you want to dig deeper into section 1031, -see 2
This means the following:
If you use a service like ShapeShift, then you must report on the realized gain/loss for the original asset AT THAT EXACT MOMENT.
I.E. You bought 100 worth of BTC on JAN 1 2018. Lets say that is .02 BTC for simplicity. You then on MARCH 15 use shapeshift to exchange that entire .02 BTC for LTC. Lets assume in the meantime that has appreciated to 200 USD during those 3 months. You now have a 100 gain that needs to be recorded AT THAT MOMENT. It will be taxed as a short term capital gain if you are acting as an individual. That is the same rate you are paying at whatever bracket you are already in.
If you are doing this as a passthru business entity, then it would be 20% capped. This is clearly a good way to start structuring yourself. This does come with a lot of additional things, and doing a schedule C is not the best time you will ever have in your life most likely, but it can save you a lot of money.
This is double true if you are
The effect I see this having will be the following on crypto markets with US based traders.