Some people may be under the impression they can escape the IRS and their State boards of revenue, they cannot…My background was as a criminal investigator assigned to a federal drug task force and we had a IRS CID agent assigned to our unit. When we couldn’t catch them with drugs we used IRS CID to dismantle their financial network and assets very effectively I might add. According to IRS 988 this would be ordinary income and I suggest paying estimated taxes right after we exchange. Banks reports out these types of exchanges so there is no way out of paying taxes.
