MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

The Crypto Swap Tax Trap 🛑

2 Jul 2026 · 1 min

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1:14

In this concise explanation, the speaker clarifies U.S. tax treatment for restricted cryptocurrency tokens such as ATLA, Bitcoin, Solana, and XRP. The key points are: (1) the holding period for tax purposes begins the moment the tokens are purchased, regardless of any future lock‑up; (2) the moment the lock‑up expires and the holder is merely permitted to sell or trade does NOT create a taxable event, because no disposition has occurred; (3) a taxable event is triggered the instant the holder actually disposes of the tokens—whether by selling for USD, swapping for another crypto, or otherwise transferring— and tax is owed on the difference between the original purchase price (basis) and the fair‑market USD value at the time of the disposition. The speaker emphasizes that the location of the tokens (personal wallet or exchange) is irrelevant for tax purposes.

Chapters

Garland bought crypto, ATLA coins, Bitcoin, Solana, XRP. Don't care. You bought tokens, you bought coins. Now, are you allowed to sell them yet? No, there's a restriction on them. They wanted to raise capital or for whatever reason, there's a 12-month, an 18-month or whatever, and then they're gonna start to be available for you to sell or trade at some point in the future. Okay? So when you bought them, that's when your holding period started. That's the first point. Then at some point in the future, you were allowed to sell or trade them. Now, the date that you were available, allowed to start selling them, are you taxed? No, you didn't sell 'em, you didn't trade 'em. You could. Okay, nothing taxable has happened yet. Your basis is what you paid for them. Oh, but now you want to sell or trade some of those. That's when you are taxed. Well, I'm just going to trade 'em for USD, sell them for USD. I'm going to sell them or trade them for Bitcoin. I'm not going to put 'em in my own wallet. Does not matter. The minute you convert them to a different coin, you've sold them, transferred them, traded them. That is a transaction, and you will be taxed on the difference between what you bought them for and the current US dollar equivalent.