BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
SUBSCRIBE
BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
BlockNews.com
No Result
View All Result
Home Crypto

 Lawmakers Introduce Bill to Simplify and Exempt Certain Crypto Transactions from Taxes

BlockNews Team by BlockNews Team
September 10, 2022
in Crypto, Finance, Politics
Reading Time: 4 mins read
A A
Crypto-Tax
1
SHARES
16
VIEWS
Share on TwitterShare on Reddit

U.S. Senate Banking Committee Ranking Member Pat Toomey (R-PA) and U.S. Senator Kyrsten Sinema (D-AZ.) introduced a new bill called the Virtual Currency Tax Fairness Act. This bill is meant to streamline using digital assets for day-to-day purchases. Promoted as bipartisan, the bill seeks to exempt from taxation certain personal transactions that are small in value and involve using virtual currencies for goods and services.

You might also like

Taiwan Moves Forward with Crypto Regulation: A New Era for the Industry

Crypto Exchange GMX Proposes Deployment to Coinbase Blockchain

Bitcoin Price Prediction: BTC Back Below $28K As US Banking Crisis Escalates

Current Tax Treatment of Cryptocurrencies 

Under current tax treatment, a taxable event occurs every time a digital asset is used, exchanged, sold, or otherwise disposed of. Any gains from virtual currency transactions—commonly referred to as cryptocurrencies—must be reported as taxable income on one´s tax return. 

This is true regardless of the size and the purpose of each transaction. Specifically, a non-exempt taxable event occurs even if “solely by a fraction of a penny.”

Whether an individual is buying a cup of coffee or paying for a taxi fare, the individual must calculate the fair market value (“FMV”) of their crypto at the time of disposal and record it. As a result, keeping track of these small transactions is incredibly challenging—if not impossible—and works to discourage people from even using crypto in the first place. As Senator Toomey rightly put it,

While digital currencies have the potential to become a regular part of Americans’ everyday lives, our current tax code stands in the way.

How the Bill Will Change the Taxing of Crypto

The Virtual Currency Tax Fairness Act of 2022 is a bill “[t]o amend the Internal Revenue Code of 1986 to exclude from gross income gain from disposition of virtual currency in a personal transaction.”

The bill would simplify the difficulties of keeping track of small purchases with crypto by establishing a de minimis exemption for gains of less than $50 on personal transactions and personal transactions under $50.

The U.S. Senate Committee on Banking, Housing, and Urban Affairs state that the bill aims to allow people to use digital assets for everyday purchases by creating a “tax exemption for little personal transactions.”

Further, there is also built-in protection against the misuse or manipulation of the intended purposes of this bill. To protect against those wishing to take advantage of the bill and the bill´s exemption—for instance, by trying to evade taxes on more significant transactions—the bill “includes an aggregation rule to treat all sales or exchanges that are part of the same transaction as one sale or exchange.”

Reaction and Expected Effect of Bill

The bill is being promoted because it can relieve users from keeping track of small personal transactions. This is important because now, more people can participate in the crypto industry for small purchases. Further, by relieving some of these burdens, the bill “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.”

Kristin Smith, Executive Director of the Blockchain Association, notes that this bill is crucial because it would ease consumer burdens while also allowing Americans to understand their crypto tax obligations.

Jerry Brito, Executive Director of Coin Center, claims that this bill “would foster the use of crypto for retail payments, subscription services, and microtransactions” and “solidify America’s leadership in cryptocurrency.” He further noted,

More importantly, it would foster the development of decentralized blockchain infrastructure generally because networks depend on small transaction fees that today saddle users with compliance friction that no doubt costs the economy more than the tax revenue that’s otherwise generated. 

Simply put, the bill would create a viable structure for taxing virtual currency purchases and foster a system that strengthens and legitimizes the use of cryptocurrencies in the economy. On this point, Representative David Schweikert of Arizona asserted that “[t]his legislation is an important step forward, and it lays the groundwork for growing the digital economy.”

Conclusion 

Senators Toomey and Sinema are being praised for introducing the Virtual Currency Tax Fairness Act of 2022—a bill that would exempt from taxation particular small personal 

Tags: BlockchaincryptoWeb3
TweetShareShare

Recommended For You

Taiwan Moves Forward with Crypto Regulation: A New Era for the Industry

by BlockNews Team
March 22, 2023
0
Taiwan Crypto

Taiwan's Financial Supervisory Commission (FSC) confirmed as the chief regulator for the cryptocurrency market, providing a structured approach to the growing industry. The FSC plans to collaborate with...

Read more

Crypto Exchange GMX Proposes Deployment to Coinbase Blockchain

by BlockNews Team
March 22, 2023
0
gmx exchange

GMX, a decentralized derivatives exchange, has received community approval to deploy the protocol on Coinbase's (COIN) recently announced layer2 blockchain, Base. GMX community members have expressed support for...

Read more

Bitcoin Price Prediction: BTC Back Below $28K As US Banking Crisis Escalates

by BlockNews Team
March 22, 2023
0
bitcoin price

Bitcoin price has been on a notable uptrend, rising 43% in a span of two weeks. The US banking crisis worsens and could claim First Republic Bank as...

Read more

Crypto Flourishes in Vietnam with 16.6 million Holders

by BlockNews Team
March 22, 2023
0
vietnam crypto

Vietnam has emerged as a key player in the international cryptocurrency market, with about 17% of its population possessing digital currencies. Bitcoin is the most popular digital currency,...

Read more

Crypto Twitter Thinks the Fed’s $297B Balance Sheet Expansion Is ‘QE’, but It’s Not

by BlockNews Team
March 22, 2023
0
crypto twitter

The most recent rise in the central bank's balance sheet, according to some analysts, is not as obviously stimulative as the one that came after COVID-19. The US...

Read more
Next Post
OneCoin-founder

OneCoin Founder Accomplice, Extradited To US to Face Charges Over Crypto Fraud

Related News

Crypto-Market-Cap

The Crypto Market Set to Reclaim $3 Trillion Market Cap

September 15, 2022
microsoft

Microsoft Edge Browser Tests Native Crypto Wallet Integration

March 20, 2023
gameswift

GameSwift Set to Accelerate Web3 Via Passwordless Sign-in on Systems

March 3, 2023

Browse by Category

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized
BlockNews.com

BlockNews.com brings you the most important Crypto and NFT news in the space.

CATEGORIES

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized

RECENT POSTS

  • Taiwan Moves Forward with Crypto Regulation: A New Era for the Industry March 22, 2023
  • Crypto Exchange GMX Proposes Deployment to Coinbase Blockchain March 22, 2023
  • Bitcoin Price Prediction: BTC Back Below $28K As US Banking Crisis Escalates March 22, 2023

© 2022 BlockNews.com - Crypto and NFT news website by JRNY Club.

No Result
View All Result
  • Home
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides

© 2022 BlockNews.com - Crypto and NFT news website by JRNY Club.

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?