US senators pushed a bill to make small crypto transactions tax-free – Rayrice Forex News

US senators pushed a bill to make small crypto transactions tax-free

Prominent United States senators are trying to exempt Americans from tax tracking every time cryptocurrencies change hands, passing a bill that would exempt from reporting any transaction worth up to $50 or any trade that earns less than $50.

Senator Patrick Toomey (R-Pa) joined Kirsten Sinema (D-Ariz) in pushing for an exemption from tax requirements for crypto users who make small investments or purchases. Their Virtual Currency Tax Fairness Act is related to a similar effort previously introduced in the House of Representatives. The idea of ​​clearing low-level transactions from tax concerns has appeared elsewhere, including in a broader bill introduced this year by Senators Cynthia Lammis (R-Wyo.) and Kirsten Gillibrand (DN.Y.).

“While digital currencies have the potential to become a part of everyday life for ordinary Americans, our current tax code stands in the way,” Toomey said. Before retiring from the Senate at the end of this term, he sought to help the crypto industry in several tracks.

The final bill allows people to “easily use cryptocurrencies as an everyday payment method, tax-free for small personal transactions like buying a cup of coffee.”

The Internal Revenue Service has a strict crypto policy: “When you sell virtual currency, you must recognize the capital gain or loss on the sale,” the IRS announced on its website.

That standard is one of the roadblocks standing in the way of using crypto as an alternative way to pay for things in the US, industry advocates have argued.

“This will encourage the use of crypto for retail payments, subscription services and micro-transactions,” said Jerry Brito, executive director of the Coin Center, a Washington-based crypto policy think tank. “More importantly, it encourages the development of a decentralized blockchain infrastructure in general because networks rely on low transaction fees that today put users at odds with compliance.”

However, the new law faces an uphill battle in Congress, which is on a long recess in August ahead of the midterm elections. Despite some movement in efforts to regulate stablecoins, most congressional insiders predict that crypto is unlikely to see significant progress in legislation until next year.

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