Internal Revenue Notice IR-2014-36 IRS Virtual Currency Guidance. The gist of it was that for tax purposes crypto is taxed as property.@surfermarley the reality is there is no tax free lunch for those subject to US tax laws - including expats (although with expats some foreign income exclusions may apply). The IRS did release some cursory guidelines around cryptocurrency transactions on March 25, 2014 with
If an individual earns rewards here, the IRS views that as earning taxable income. The writer is paid in property with a determinable fair market value, and that would need to be recognized as income. Curation rewards earned would be treated the same as would Interest earned from locking up STEEM as STEEM Power. You are correct about needing to track every single event, but respectfully, the sports analogy is incorrect. You can fairly value STEEM at the close of each trading day from exchanges such as Bittrex (both for earning and spending purposes). CoinTracker Info is an awesome application to help keep these records.
In terms of deferring tax liability associated fom crypto to crypto trades based upon a 1031 like property exchange, I council those whom I advise not to. The reason is under that subsection of the tax code, a series of exemptions to that rule could apply to crypto and disqualify the exemption, so you'd potentially owe back tax, fines and interest. Case in point, the DAO was ruled by the SEC as an unregistered security, which would disqualify any 1031 tax deferral on DAO tokens because securities are one of those listed exclusions. The SEC even commented each token offering would need to be ruled on a case by case basis. Some blockchain governance models (POS and DPOS) have the potential to have the crypto be ruled as interest or interests in a partnership, which would invalidate the 1031 claim as well.
I'm going to be giving a Crypto Tax Workshop for Beginners through the Rocky Mountain Steemit group and I've been asked by @aggroed to broadcast it on MSP Waves. If you or anyone else is interested, I have a blog post with all the details.
So you are the one here that's really well informed! Excellent addings, thank you!!
Also I love the idea of a crypto tax workshop, that's exactly what we need here.
I'll check out your blog!