US Officials Reintroduce Tax Relief Bill For Small Crypto Transactions
House representatives have reintroduced a bill that aims to give tax relief to small crypto transactions, exempting traders from paying taxes on payments less than $200.
First introduced in 2020, the Virtual Currency Tax Fairness Act is an amendment to the Internal Revenue Service’s tax code, and has been resurfaced by Reps. Suzan DelBene (D-Wash.), David Schweikert (R-Ariz.), Darren Soto (D-Fla.) and Tom Emmer (R-Minn.)
“Gross income of an individual shall not include gain, by reason of changes in exchange rates, from the disposition of virtual currency in a personal transaction… The preceding sentence shall not apply if the gain which would otherwise be recognized on the transaction exceeds $200,” the bill says.
The bill’s contents contrast with current tax laws that stipulate that all transactions that result in gains must be taxed as income.
Jerry Brito, executive director of Coin Center, a non-profit crypto advocacy organization, said,
“Today you have to keep track of and report every transaction you make using them, whether it’s a $10,000 investment trade or whether you’re buying a 99¢ song online or a latte at a cafe…This obviously creates friction and puts cryptocurrencies at a disadvantage relative to other digital payment methods."
Not only will the bill “create a alevel playing field for digital currencies,” Brito says that it will also “help unleash innovation on applications like micropayments, which can consist of dozens of transactions per minute and thus are difficult to square with the current law.”
DelBene, the face behind the bill says that antiquated rules pertaining to virtual currency don’t take into account “its potential for use in our daily lives,” instead treating crypto like securities.
“However, virtual currency has evolved rapidly in the past few years with more opportunities to use it in our everyday lives. The U.S. must stay on top of these changes and ensure that our tax code evolves with our use of virtual currency. This commonsense bill cuts the red tape and opens the door to further innovations, ultimately growing our digital economy.”
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.