> The reason is when you have some other crypto holding and you want to close out your position but not have any reportable tax or legal liability.
In the US trading crypto to crypto has tax liabilities.
In the US trading crypto to crypto has tax liabilities.
Or, more accurately, just because you record the ownership of an asset on a blockchain doesn't mean you're allowed to violate the law.
Whether this is the case with crypto currencies is all dependent on how your particular jurisdiction has chosen to classify crypto. Or often just your best guess if your particular jurisdiction hasn't been clear on the classification as many haven't.
You realize a profit or loss every time you transact, and that's a taxable event. It's not tied to whether or not the transaction is into or out of fiat currency.