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Tax-Free Ways to Transfer Bitcoin and Other Crypto: Expert Take

•, By Robert W. Wood

But taxes are an ever-present danger, and it is clear that the Internal Revenue Service (IRS) is looking for reporting. With all the worry about so-called 1031 tax-free exchanges that can no longer be used for cryptocurrency, are there any other ways to transfer your crypto without triggering taxes? Here are some ideas, each way has pluses and minuses.

Contributing to a corporation or partnership

How about contributing your cryptocurrency to a corporation or partnership that you will control? In general, transferring property into a corporation in exchange for its stock is a taxable event.

That is, the transaction is treated as if you sold the property to the corporation in return for cash. The difference between the stock value you received, and the tax basis in the property you transferred to the corporation, will result in a gain or loss. That means taxes. Of course, you generally don't want this sale treatment.

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