Sooner and later, 1031 exchange will allow real estate investor to do the same for #Bitcoin ...
Discussion
I would like a deeper explanation of your thoughts on this please. How can a “like kind” exchange be executed with bitcoin?
The point i'm trying to make here is to allow investors have more options to exchange either from real estate to #Bitcoin or vice versa by applying section 1031 exchange to take advantage of capital gain tax-deferred.
I said Bitcoin can be a "like kind" with real estate, because Bitcoin has a higher probability of getting a higher price evaluation (based on the characteristics of being a best asset class) compare with other counterparts like a bar of gold or shares of stock. Plus, gold is not easily verified and transportable and stocks have counterparty risks.
Imagine 1 Bitcoin has an evaluation of $1 million per coin in market value. Some Bitcoiners might want to use that BTC to pay for their first home to start a family. Rather than selling that Bitcoin into cash and use cash to pay for their first home. Consequently, they will have to face double tax, one is at selling the BTC, and another is when purchasing a house.
I'm thinking using section 1031 exchange to allow people to do this type of transaction is a better option.
I'm not an expert on real estate, but I just had a thought experiment about this idea worth considering.
Have you ever heard that adage that “whatever congress calls a bill it does the exact opposite?”
The “tax cut and jobs act” otherwise known as the Trump tax cuts severely restricted 1031 exchanges. Before 2018 the accepted definition of “like kind” meant: a house for a house, a boat for a boat, a horse for a horse, etc. Now exchanges are limited to real estate only and “like kind” identifies the type of property.
For example: you cannot exchange residential property for commercial property. IE a house for a strip mall.
Remember, all taxation of individuals is theft, the government is not working for you, it’s feeding off you.
Thanks for the insight. The same is true when they said Cost Of Living Adjustment (COLA) every year, basically means we are paying more for less goods.