A bill has been introduced in the US Congress that seeks to create a tax exemption for cryptocurrency transactions under $600.
Rep. Jared Polis and Rep. David Schweikert, co-chairs of the Blockchain Caucus, are seeking to create a de minimis exemption for cryptocurrency transactions for goods or services with the Cryptocurrency Tax Fairness Act.
The bill states:
“Gross income shall not include gain from the sale or exchange of virtual currency for other than cash or cash equivalents” with the limitation that “The amount of gain excluded from gross income under subsection (a) with respect to a sale or exchange shall not exceed $600.”
Jerry Brito, executive director of Coin Center, explained that the bill resembles the same kind of exemption that foreign currency enjoys today. He added that the Cryptocurrency Tax Fairness Act, if passed, would also require the Treasury Department to issue guidelines for informational reporting on digital currency transactions for which capital gains is due.
“A de minimis exemption that completely excludes all small transactions, as well as clear IRS guidance and informational reporting, would be a lifesaver at tax time for cryptocurrency users. This is the first time a bill has been introduced in Congress to encourage cryptocurrency’s use and development and Coin Center is thrilled to be a part of it”, Brito said.
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