The U.S. Congress has again introduced a bill calling for the exemption of capital gains tax on personal cryptocurrency transactions.
The Virtual Currency Tax Fairness Act of 2020, announced in Washington, D.C. on Thursday, was proposed by Congressman Suzan Delbene from Washington and David Schweikert from Arizona.
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In 2014, the U.S. Internal Revenue Service (IRS) determined that Bitcoin and other cryptocurrencies constituted a form of property, and the bill addressed a problem that arose. In other words, large and small transactions will trigger taxable incidents, leaving taxpayers to bear capital gains taxes. Critics argue that such rules affect the performance of cryptocurrency payments due to the tax burden.
Existing tax laws have difficulty dealing with cryptocurrencies because they sometimes appear as investments, sometimes as commodities, and sometimes the same as other currencies. For the last type of transaction, the bill will simplify the work of cryptocurrency traders and users.
The goal of the new bill is to allow tax exemption if the calculation of transactions involving cryptocurrencies is less than $ 200.
If approved, the bill will cover all transactions after December 31, 2019.
The content and intent of the bill is similar to a bill submitted to Congress in 2017, and was co-sponsored by Schweikert and then MP Jared Polis. However, the bill at that time proposed a waiver of a minimum of $ 600 in transaction proceeds.
Cryptocurrency advocacy group Coin Center has been working on the popularity of cryptocurrencies in Congress, and the agency is also helping to secure minimal exemptions. The agency said on Thursday:
"This simple solution addresses an obvious issue with current tax treatment of cryptocurrencies and helps create a level playing field for this technology."
Legislation around cryptocurrencies and blockchain is becoming more sophisticated. But the unique pressures of the hearing-not to mention the pressure including the presidency-could be an obstacle to substantial progress on the proposed bill.
Nonetheless, the new bill-along with measures proposed in the past, such as the Forked Assets Act to provide taxpayers with asylum by lawmaker Tom Emmer-further demonstrates that there may be continued interest in tax legislation.
Taxing cryptocurrencies has proven to be a major obstacle in the United States. In December last year, eight members of Congress wrote to the IRS asking the IRS to clarify the rules for reporting income resulting from the use of hard forks or airdrops.
Last year, just before the April tax filing deadline, 21 representatives sent a similar letter to the IRS, also expressing dissatisfaction with the current tax transparency.