July 27, 2022 1:08 PM UTC
July 27, 2022 at 1:08 PM UTC
A new two-way bill has been introduced in the Senate that could simplify the use of cryptocurrency for everyday purchases by providing a tax exemption for private crypto transactions under $50, the same as before capital gain unit but at $50.
New “Virtual Currency Tax Fairness Act”
A bipartisan bill, called the “Virtual Currency Tax Fairness Act,” was introduced in Congress on Tuesday by Senators Pat Toomey (R-PA) and Kyrsten Sinema (D-AZ).
According to the announcement from the U.S. Senate Committee on Banking, Housing, and Urban Affairs, the bill aims to “simplify the use of digital assets for everyday purchases” by making “a tax exemption for small personal transactions.”
Senator Toomey commented, “While digital currencies have the potential to become a normal part of everyday American life, our current tax code is getting in the way.” He added:
The Virtual Currency Tax Fairness Act may make it easier for Americans to use cryptocurrencies as everyday payment by exempting small personal transactions like buying a cup of coffee from tax.
Under current law, whenever crypto is used to acquire purchases of any amount, a non-exempt event occurs. an individual would owe the Internal Revenue Service (IRS) capital gains on the transaction if the price of crypto increased even by a fraction of a penny.
The new legislation seeks to “amend the Internal Tax Code of 1986 to exclude from gross financial gain Delaware de minimis gains from related sales or exchanges of virtual currency, and for alternate functions,” the bill’s text reads. .
The ad continues:
The Virtual Currency Tax Fairness Act would simplify the use of digital assets for everyday transactions by creating a smart Delaware minimis exemption for gains of only $50 on personal transactions and for private transactions under $50.
Toomey and Sinema’s Virtual Currency Tax Fairness Act further enjoys bidirectional support in the House of Representatives. Representatives Suzan DelBene (D-WA) and David Schweikert (R-AZ) introduced an earlier version of the legislation in February. This bill is sought to exempt personal transactions created with cryptocurrency once earnings are $200 or less.