Following a bill presented by a bipartisan group of the United States House of Representatives, investors who make crypto gains of $200 or less may be excluded from paying taxes.
The bill, named the Virtual Currency Tax Fairness Act, is an amendment to the Internal Revenue Service tax code, and was recently introduced by Suzan DelBene (WA-01) and David Schweikert (AZ-06).
Crypto Tax Situation in the U.S.
At the moment, United States residents are expected to calculate and report any slight change in the value of their cryptos against the U.S. dollar, and report the difference to the IRS.
It does not matter what the cryptocurrencies are used for, as long as it is used to make purchases or traded on exchanges, they must report the difference against the dollar, or risk facing tax evasion charges.
Selected Reps Against the IRS
Commenting on the IRS requirement, the bipartisan group said cryptocurrencies have evolved in recent times and more opportunities have been created to use the nascent asset class in real-life situations.
The bipartisan group added that these stringent demands will make it near impossible to use the asset class for everyday activities, thus mitigating crypto growth.
“Virtual currency is reshaping our everyday lives, and the United States needs to recognize this and work to treat these currencies fairly in our tax code,” Rep Schweikert said in the announcement.
Kristin Smith, director of the Blockchain Association, noted that as crypto use in retail payments surges, Americans need to understand their tax obligations, adding that the proposed bill would relieve the burden for small crypto traders.
“We’re proud to support the bill’s reintroduction in the 117th Congress,” Smith added.
Difficulty in Calculating Crypto Taxes
Calculating cryptocurrency taxes has been a major issue since the discussion of taxing cryptocurrency gains started.
Crypto traders have complained about the difficulty in keeping track of all their crypto-related transactions.
In a bid to relieve the stress on crypto traders, popular cryptocurrency exchange Coinbase launched an initiative dubbed Coinbase Tax Center, which would help its users to easily calculate their taxes.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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