Bill Returns To Exempt Small Crypto Transactions From Taxes in US

A bill seeking exclusion of personal cryptocurrency transactions from taxes in gross income gains, and subsequent exemption of the transaction from taxation has been reintroduced in the Congress of the United States.

What will be changed by the bill

The bill goes under the name ”The Virtual Currency Tax Fairness Act of 2020” and states that virtual currency transactions regarded as personal ones are not subject to taxation. Users would not be required to report instances when they send crypto, the total value of which does not exceed $200.

The crypto tax bill was introduced on January 16 by the representatives Suzan DelBene (D-WA) and David Schweikert (R-AZ).

The 2017 version of the bill, presented by Schweikert, outlined a larger sum exempt from taxation — $600.

The current tax law has troubles with cryptocurrencies, as they may display the behavior of investments, commodities or traditional currencies. It is to this last type of transaction that the bill seeks to simplify for crypto traders and users.

Crypto taxation challenges and the 2017 bill

Now the IRS can impose taxes on gains earned or realized unknowingly, on the ground of the value of their crypto at the time of purchase. Such a system can make use of crypto as currency utterly awkward within the U.S.

The bill would add a new category to the existing IRS exclusions from classification as gross income.

Other problems of U.S crypto taxation

Cryptocurrency taxation has turned out to be a sticking point for the U.S. In December, eight congresspeople requested the tax agency for clarification of the rules for reporting income due to hard forks or air drops.

Last year, right before the tax reporting deadline in April, 21 representatives made a similar request to the IRS, demanding clarity.