New Senate Bill To Make Small Crypto Transactions Tax-Free
2022.07.27 16:06
New Senate Bill To Make Small Crypto Transactions Tax-Free
- A new bill that will exempt small crypto transactions from Capital Gain Taxes entered the Senate today.
- US Senators Pat Toomey and Kyrsten Sinema introduced this bill to streamline crypto.
- Last month, a similar bill entered the Senate legislation with Senators Lummis and Gillibrand.
To liberate Americans from monitoring taxes every time cryptocurrencies changed hands, a new bill has been introduced at the US Senate today, in which small crypto transactions will be exempted from Capital Gains Taxes.
To streamline crypto transactions, Senators Pat Toomey (R-Pa.) and Kyrsten Sinema (D-Ariz.) introduced this bill named the Virtual Currency Tax Fairness Act. The bill will establish a de minimis exemption from taxes on crypto transactions or profit from crypto trading, up to $50.
Presently, crypto investors in the US are required to report profits made on the value of crypto they purchased. This implies that crypto is primarily an investment rather than a payment mode.
Despite crypto users asking for legal protection similar to what already exists for foreign currency exchange/usage within the country, the Internal Revenue Service (IRS) has not shown interest in pursuing these nominal transactions.
Applied to transactions valued below $50, with a provision to adjust that benchmark alongside inflation, this bill would be inapplicable to trades between crypto and fiat currencies. Moreover, “all sales or exchanges which are part of the same transaction (or a series of related transactions) shall be treated as one sale or exchange,” the bill stated.
The bill has already received endorsements from several influential members of the crypto lobby, including the Blockchain Association for Digital Asset Markets and Coin Center. In an attempt to help the crypto industry on multiple tracks before retiring from the Senate at the end of this session, Senator Toomey conveyed:
While digital currencies have the potential to become an ordinary part of Americans’ everyday lives, our current tax code stands in the way
Toomey further stated that the latest bill will enable people to “use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee.”
Last month, a similar bill named the omnibus crypto bill was introduced in the House of Representatives by Senators Cynthia Lummis (R, WY) and Kirsten Gillibrand (D, NY), which set the de minimis at $200. That was the first time such a bill had appeared in the Senate legislation.
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