A bill that seeks to exempt small crypto transactions from taxes for capital gains has been reintroduced in the US Congress. The aim of the bill is to simplify crypto tax regulations.
The bill was introduced on 16 January 2020, by representatives Suzan DelBene (D-WA) and David Schweikert (R-AZ). An earlier version of the bill was introduced by Schweikert in 2017. This older version of the bill featured a comparatively larger exemption.
A Bill for Change
Currently, tax laws in the United States are struggling with the categorization of cryptocurrencies. The confusion arises from the fact that such currencies are sometimes used as assets while at other times are used as investments. Furthermore, they are also used as other currencies for carrying out day-to-day business transactions. It is the last case which the bill seeks to change by simplifying the process for the users.
The bill is called the Virtual Currency Tax Fairness Act, 2020. Its main purpose is to provide an exemption to the transaction of virtual currencies that fall in the personal category. This would simplify things for crypto users as they would not have to face the circumstances in which they have to report the change in the value of crypto— relative to the US dollar— spent by them on daily expenses.
Differences Between the Older and the Current Bill
The newly reintroduced bill would allow an exemption for the taxpayers from a reporting duty if the gains involved are within $200. This would generally be applicable to big purchases and wild bull markets. On the other hand, the older bill had set this limit at $600.
The current bill would also add a new category in the present IRS exclusions from gross income classification.