A bill there introduced in the Senate today that would prevent Americans from having to declare their capital gains or losses on the smallest crypto transactions.
Introduced by senators Patrick Toomey (R-PA) and Kyrsten Sinema (D-AZ), the Cryptocurrency Tax Fairness Act would exempt the reporting of crypto transactions of less than $50, or trades that earn less than $50.
“While digital currency has the potential to become a regular part of Americans’ daily lives, our tax code is currently standing in the way,” said Toomey added that the bill would help Americans “use cryptocurrencies more easily as a means of everyday payment by exempting them from taxing small personal transactions like buying a cup of coffee.”
Now, the same bill they are working their way through Congress. The Responsible Financial Innovation Act, introduced by senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY), would remove the obligation to provide information on crypto profits of $200 or less to the Internal Revenue Service.
Now, IRS regulations country even the smallest crypto transaction can be a capital event: “When you sell virtual currency, you must recognize a capital gain or loss on any sale, subject to the limitation on the reduction of capital losses.”
The bill being introduced today is part of the Virtual Currency Tax Fairness Act introduced again in the House of Representatives earlier this year, which defined “de minimis” capital exemptions on crypto transactions with realized profits of less than $200. This is an amendment to the current IRS tax code.
The aim is to expand the use of cryptocurrencies, according to a statement from Suzan DelBene (D-WA), who introduced the bill along with David Schweikert (R-AZ).
“The antiquated regulations on virtual currency do not take into account the potential for use in everyday life, but are considered more like stocks or ETF“said DelBene. “This common-sense bill eliminates red tape and opens the door to further innovation, which ultimately improves our digital economy.”
