To encourage broader adoption of crypto, U.S. senators on Tuesday introduced a new bill to exempt small cryptocurrency transactions or deals from capital gains taxes.
The new bipartisan law, pushed by Republican Sen. Patrick Toomey and Democratic Sen. Kyrsten Sinema, would exempt Americans from taxes every time they engage in cryptocurrency transactions. Dubbed the Virtual Currency Tax Fairness Act, the law intends to offer a tax exemption for bitcoin transactions up to $50 or trades with a net profit of up to $50.
Based on the announcement by the US Senate Committee on Banking, Housing and Urban Affairs, the new bipartisan bill intends to “simplify the use of digital assets for everyday purchases” by introducing a “tax exemption for small personal transactions.”
The latest law will allow Americans to “more easily use cryptocurrencies as an everyday payment method by exempting small personal transactions like buying a cup of coffee from taxes,” Senator Toomey said. “While digital currencies have the potential to become a normal part of Americans’ everyday lives, our current tax code stands in the way,” he told CNBC’s Squawk Box.
The Internal Revenue Service requires individuals involved in the sale of virtual currency to record any capital gains or losses from the sale. Under current law, whenever cryptocurrency is used in a transaction, a taxable event takes place — meaning the person executing the trade owes the IRS any capital gains on the transaction.
The new legislation aims to “amend the Internal Revenue Code of 1986 to exclude from gross income small gains from certain sales or exchanges of virtual currencies and for other purposes,” the bill reads.
So far, the Virtual Currency Tax Fairness Act has bipartisan support in the House of Commons. In February, Congressmen David Schweikert and Suzan DelBene introduced a version of the bill aimed at exempting in-person cryptocurrency transactions with a profit of $200 or less.
Since the law was only recently introduced, it is not yet law and could see a steep rise in Congress as the House of Commons faces a lengthy recess in August before the midterm elections.
Bitcoin (BTC) was trading up 1.34% to $21,362.78 as of 4:04 a.m. ET Wednesday with 24-hour volume of $26,437,206,277 based on the latest data from CoinMarketCap.
https://www.ibtimes.com.au/us-senators-introduce-bill-make-small-crypto-transactions-tax-free-1835043?utm_source=Public&utm_medium=Feed&utm_campaign=Distribution US Senators introduce bill to make small crypto transactions tax free