Interesting. Maybe I am just pessimistic, but I find it hard to believe the IRS will look at BitAssets in this way.
But let us assume BitAssets on a blockchain are all just different representations of a variable amount of BTSX. Can you people lucky enough to have in-house tax experts answer the following question: how would capital gains taxes work when you actually convert to fiat or real goods/services outside of the blockchain? If I buy x BTSX at price p1, do some shorting, trade for some BitAssets, then later trade back to BTSX, and now I have y BTSX at price p2 and I want to convert z of the y BTSX into dollars, how do I figure out my cost basis (I imagine it depends on the exact history of trades I have done)? Also, that means I have to now worry about a cost basis of BitUSD as well correct? So I buy BTSX at price p1, it appreciates in value to price p2, now I convert all of it at price p2 to BitUSD. Under the assumptions you are all making, that conversion would not be a taxable event. But if I later spend that BitUSD on goods/services, that is a taxable event and I would have to pay some capital gains taxes since I obtained that BitUSD with far less value than its nominal value, correct? Honestly, this all sounds more confusing than just treating the BitAsset trades as taxable events.