2018 EDIT: Although this post was inspirational, US Congress addressed this issue in the Tax Reform law of 2017, and any trades after Jan 1st 2018 cannot have this treatment. The few years of ambiguity from the existence of altcoins to the law changing will likely never be addressed.
Most altcoins do not have markets in national currencies, and instead can only be bought with other digital currencies.
So therefore by the IRS' own guidance, you are trading property for property. Which in some cases is privy to like-kind treatment where capital gains tax events are no longer created upon liquidation into another like property until settled in a national currency.
IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange.
The IRS' limitation in unilaterally recognizing currencies or recognizing distinct asset classes has pigeonholed blockchain based digital currency in an area of the law that has many distinct benefits, with the ambiguous designation of property.
The best like-kind guidance that the IRS has attempts to list asset classes which receive like-kind treatment, and also attempts to list asset classes that are SPECIFICALLY NOT ABLE to receive like-kind treatment.
Both properties must be held for use in a trade or business or for investment. Property used primarily for personal use, like a primary residence or a second home or vacation home, does not qualify for like-kind exchange treatment. Both properties must be similar enough to qualify as "like-kind." Like-kind property is property of the same nature, character or class. **Quality or grade does not matter.**
The IRS has potentially accidentally created a huge tax benefit/loophole for digital currency speculation by a limitation of their own Congressional mandate, where previously in most assets that weren't included in their list (like, say Credit Default Swaps), one could operate under the assumption that the trades were open and closed in national currencies, and therefore subject to capital gains tax.
(Most IRS guidance so far seems based on the assumption that people buy and sell bitcoin - specifically bitcoin - for US dollars, and ignores the notion that there is a parallel burgeoning economy within that ecosystem.)
Would the buying and selling of blockchain based digital currency, using other blockchain based digital currencies, be subject to like kind treatment and exempt from capital gains until exchanged for a non-blockchain based good or service (or national currency)?
Before you say "what? asking people on the internet complicated legal things you should talk to a CPA", you have to understand that both the CPAs and the next pencil pushers in the government who are tasked to this will simply google it and form their opinion based on things that rank highly in SEO, like this exact question will. You'll just have to accept that it hasn't been asked before, and that it is more on topic here than on the bitcoin stackexchange.