“Realization” has a meaning in accounting and swapping property for property does, generally, realize the gains. This might or might not generate an informatio

“Realization” has a meaning in accounting and swapping property for property does, generally, realize the gains. This might or might not generate an informational return to the IRS. Most transactions in the economy don’t. They’re still taxed. The tax system functions on a combination of informational returns and auto matching, human-intensive audits on a small selection of returns each year, and the honor system. “They can’t tax us if we don’t write stuff down!” is believed by many people, including Bitcoiners, and they are often surprised to find that the IRS has thought of this clever strategy before. For example: “I see you own a boat. What year did you buy it in?” “Oh I dunno.” “2015. Let’s try again: how much did you buy it for?” “I dunno.” “List price, great answer. OK, you understated your income from 2015 by $65k. Here’s your bill for $150k.” “You can’t do that!” “I get that a lot.”