Cryptocurrency Tax Fairness Act, you say?
Get this: yesterday, Rep. Senator, Patrick Toomey, and Dem. Senator, Kyrsten Sinema agreed on something.
(It was a rare moment of solidarity)
That something was the 'Cryptocurrency Tax Fairness Act.'
Here's what they proposed:
Crypto transactions of less than $50, or trades in which a person earns less than $50, should be exempt from being reported to the IRS.
Here's why they proposed it (in Toomey's words):
“While digital currencies have the potential to become an ordinary part of Americans’ everyday lives, our current tax code stands in the way.”
And here's why it's important:
It's true - IRS regulations currently state that even the smallest of crypto transactions can amount to a capital gains event.
For example:
If you were to spend $20 worth of Bitcoin on a purchase, you would then owe ~15-40% of that spend ($3-8) to the IRS.
Which makes crypto a pretty inefficient form of currency.
Having a minimum (or, as they like to say in the law/Latin, “de minimis”) capital gains exemption on crypto transactions would hugely increase the practical usability of digital currencies.
But right now, regulations inhibit people from using crypto in their daily lives.
If passed, a bill like this would open things up for higher/faster adoption, and further innovations.
Maybe we won't get stuck with so much spare change either.
