Republican Senator Pat Toomey of Pennsylvania and Democrat Senator Kyrsten Sinema of Arizona are proposing a new law that would exempt small personal crypto transactions from taxation.
Under the current system, people who use digital assets to pay for goods and services owe capital gains taxes when the value of the coin increases.
The Virtual Currency Tax Fairness Act introduced by Toomey and Sinema on Tuesday aims to change that by introducing a de minimis exemption for everyday crypto transactions.
The bill will exclude personal crypto transactions worth less than $50 or with gains under $50 from being subjected to capital gains tax.
Reads the proposed law,
“A bill to amend the Internal Revenue Code of 1986 to exclude from gross income de minimis gains from certain sales or exchanges of virtual currency, and for other purposes.”
To prevent abuse of the exemption, the bipartisan bill also includes an aggregation rule, which provides that all sales and exchanges that are part of the same transaction will be treated as one.
Toomey says that the bill will remove an obstacle that prevents the wider adoption of crypto assets.
“While digital currencies have the potential to become an ordinary part of Americans’ everyday lives, our current tax code stands in the way.
The Virtual Currency Tax Fairness Act will allow Americans to use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee.”Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
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