RE: Valuing Steem Rewards As Taxable Income Is A Vast Overstatement Of Tax Liability - Part 3 - Powering Down - "Steem Power" Is Not a Tradeable Asset, It's a Proxy For Value Like A Stock Option

Well, with taxes, it always "depends".

But the short answer is yes. You have a taxable gain on capital assets you hold (if you hold them over 1 year). Your cost basis is the value when you bought it, and the price when you sell it will hopefully be more. You will owe capital gains tax on the difference.

Technically, a 3 part trade like you mentioned usually takes place well in under 1 year-per-step, and would be subject to regular income tax like day-trading. However, you probably bought and sold at almost the same price, and have little to no taxable gain. Thus, though it is a taxable event, it probably only generated a few pennies worth of liability. Nobody monitors this sort of thing, and you are protected under the good faith clause from this sort of under-reporting.

Now, if you made a substantial gain at any point in the process, you probably have a taxable gain of some sort. However, this is the wild west for now, and we're all sort of guessing a bit. The IRS has been asked to clarify some of its crypto stances, but I suspect they don't have the requisite research or understanding to do so yet. Plus, not all crypto are the same (Steem Power is noticeably different), so a one-size-fits-all strategy is not a great idea.