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by phereford 3271 days ago
There was a podcast(1) about part of your question recently. Essentially, people are playing with "house money" as they have generated net gains from BTC and other coins. Instead of incurring a taxable event by cashing out, they might just be pouring it into ICOs.

(1): https://itunes.apple.com/us/podcast/unchained-big-ideas-from...

1 comments

I believe the IRS considers the transfer of ETH for an ICO token (or BTC, etc) to be a taxable event.
I think it's a grey area, but I am not an accountant. The government considers it to be intagible property in some scenarios and a capital asset in others. For the most part I think the capital asset happens on the conversion to fiat due to the realizing of gains and losses. If anyone else has more knowledge here, I would love to know for certain.

https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidan...

I'm 100% certain that absent a ruling letter the current guidance from the IRS is that a transfer of one token for another token (e.g. Ethereum for Bitcoin via Poloniex) is considered a taxable event, similar to, for example, selling gold and purchasing copper. I'm not sure if Ethereum tokens would be able to stretch into a different definition, but I suppose time will tell.