In November, IRS Office of the Associate Chief Counsel attorney Suzanne Sinno said taxpayers cannot defer taxes on exchanges of cryptocurrency, even for transactions that occurred before 2018. Speaking at the American Institute of CPAs conference in Washington, Sinno provided long sought clarity on the agency’s position in the matter, noting that the IRS maintains that like-kind exchange principles were never applicable to cryptocurrency.

Like-kind exchanges allow taxpayers to postpone paying tax on the gain of a sale if the proceeds are reinvested in similar property. Due to the changes made under the 2017 Tax Cuts and Jobs Act, beginning in 2018 taxpayers cannot use like-kind exchange treatment for cryptocurrency transactions. However, prior to Sinno’s comments, it was unclear to many in the industry whether taxpayers could use like-kind exchanges for cryptocurrency trades prior to 2018.