US Lawmakers Seek Tax Exemption for Bitcoin Transactions Below $600

[alyssa85]

https://www.coindesk.com/us-lawmakers-seek-tax-exemption-bitcoin-transactions-600/

Two members of the US House of Representatives have filed a bill seeking to create a tax exemption for purchases made with cryptocurrencies.

Back in 2014, the Internal Revenue Service declared that it would consider bitcoin (and other cryptocurrencies) as a kind of property for tax purposes. Any profits made when selling or exchanging a cryptocurrency triggers a capital gains requirement. Yet due to the wording of the IRS decision, that covers any transaction involving bitcoin, including an oft-mentioned purchase of a cup of coffee – essentially meaning that if you bought some bitcoin at $1, and spent it on a $2 cup of coffee, you would owe tax on the difference.

Reps. Jared Polis and David Schweikert, who co-lead the Congressional Blockchain Caucus, are hoping to alleviate some of the issues resulting from that ruling with the Cryptocurrency Tax Fairness Act.

Unveiled today, the measure, if passed, would create a de minimis exemption for cryptocurrency payments below $600 after December 31 of this year. Put more simply, transactions involving a cryptocurrency below that threshold wouldn't trigger a capital gains liability.

As the text of the bill states:

    "Gross income shall not include gain from the sale or exchange of virtual currency for 5 other than cash or cash equivalents….[if the amount of gain excluded from gross income under subsection (a) with respect to a sale or exchange shall not exceed $600."

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[Emoclaw]

This is great news, but filing a bill is far from it being passed.
I hope other countries who decide to regulate Bitcoin follow this example as well. It makes sense.

[soham]

Whooa! That's a good news. If this becomes a law, it would provide a good boost to the crypto currency market overall as many people would be interested in transacting through crypto currency and they will start buying it for the sake of avoiding high taxes. So this method will give a boost to the crypto currency market worldwide.

However, I doubt that bill will be passed, because IRS would not want to loose their hand on the potential taxes. They are likely to strongly oppose this bill. But if it happens, that will be a good news to all crypto currency users worldwide, because this move, may hike the price further.

[alyssa85]

Whooa! That's a good news. If this becomes a law, it would provide a good boost to the crypto currency market overall as many people would be interested in transacting through crypto currency and they will start buying it for the sake of avoiding high taxes. So this method will give a boost to the crypto currency market worldwide.

However, I doubt that bill will be passed, because IRS would not want to loose their hand on the potential taxes. They are likely to strongly oppose this bill. But if it happens, that will be a good news to all crypto currency users worldwide, because this move, may hike the price further.

The Americans have decided they LIKE bitcoin, not least because they can track everything through the blockchain, and collect those pesky taxes. And the IRS doesn't get to decide law, Congress decides it and the IRS just obeys the law and collects what is due.

I love how they have a "Congressional Blockchain Causus" to debate and push bitcoin-related things forward.

[Juggy777]

https://www.coindesk.com/us-lawmakers-seek-tax-exemption-bitcoin-transactions-600/

Two members of the US House of Representatives have filed a bill seeking to create a tax exemption for purchases made with cryptocurrencies.

Back in 2014, the Internal Revenue Service declared that it would consider bitcoin (and other cryptocurrencies) as a kind of property for tax purposes. Any profits made when selling or exchanging a cryptocurrency triggers a capital gains requirement. Yet due to the wording of the IRS decision, that covers any transaction involving bitcoin, including an oft-mentioned purchase of a cup of coffee – essentially meaning that if you bought some bitcoin at $1, and spent it on a $2 cup of coffee, you would owe tax on the difference.

Reps. Jared Polis and David Schweikert, who co-lead the Congressional Blockchain Caucus, are hoping to alleviate some of the issues resulting from that ruling with the Cryptocurrency Tax Fairness Act.

Unveiled today, the measure, if passed, would create a de minimis exemption for cryptocurrency payments below $600 after December 31 of this year. Put more simply, transactions involving a cryptocurrency below that threshold wouldn't trigger a capital gains liability.

As the text of the bill states:

    "Gross income shall not include gain from the sale or exchange of virtual currency for 5 other than cash or cash equivalents….[if the amount of gain excluded from gross income under subsection (a) with respect to a sale or exchange shall not exceed $600."

This is simply awesome news, now this is such a nice thing all one needs to do is keep a transactions below 600$ and keep on doing transactions. Like say I am planning to buy a new plot I can send many transactions below, 600$ and get away with paying unnecessary taxes this is so good for everyone, I. Hope this gets accepted and we get more discounts on iPhone to, as I am planning to buy one soon. Will other countries follow suit, but this shall have a major impact on bitcoin prices for sure when it's passed.

[gentlemand]

Was anybody really filing taxes for buying a Steam game in the first place? It seems utterly ridiculous. I presume they're being pragmatic and acknowledging this.

[figmentofmyass]

Was anybody really filing taxes for buying a Steam game in the first place? It seems utterly ridiculous. I presume they're being pragmatic and acknowledging this.

still, as written the tax code is clear. we owe taxes on any gains, according to cost basis. just like the taxation of any other property in a barter scenario. the real question is, who is silly enough to constantly be spending their bitcoins? i make a dozen or three transactions a year. it's not exactly difficult to keep track of.

anyway, i'm really glad to see this, though. $600 is a solid threshold where small fish won't be scared off from using BTC due to the tax man's threats. unfortunately, these reps are nobodies...

[cleofila]

Very good news! US government is taking regulation over bitcoins. it means BTC would be became legalized.

[tiger2monkey]

Great news when the measure is passed! Government is trying to reduce the burden of tax payers to report small capital gain from daily small spending of bitcoin. It is hard to balance between tax revenue and technology innovation.

[freedomno1]

That is a reasonable proposal setting up a minimum transaction volume for tax purposes would make sense. It would be strange to have a coffee taxed everytime someone does a transaction.
As long as the tax code is developed over time to clarify these cases it should be good worst thing to have is a static limit with inflation and all.

[FiendCoin]

Was anybody really filing taxes for buying a Steam game in the first place? It seems utterly ridiculous. I presume they're being pragmatic and acknowledging this.

I don't think most people are paying taxes on crypto at all, unless they are cashing out large amounts.

[Passive Coin]

I understand that this proposed law apply only to US residents. Right?
How about foreign citizen buying something at US e-commerce?
What is this mean that word "transaction"?
If I send $700 to a friend or family, this "transaction" will be taxed?

p.s.
Hahahaha .... nice logo in above post. Beautifull devil.  

[mothergodness]

The right decision, but whether it will be accepted as the main question, or even so, taxes are all consumed. Well, it remains to be hoped that this will attract even more people to legalize bitcoin in their business.

[miyaka26]

Legalization of bitcoin to US is a good sign that bitcoin will be imposed a tax by the Government, $600 threshold is fine for the ordinary people who are spending a little coins for their transaction and i see that in the future that the neighboring countries and Asia will follow this type of implementation of tax to bitcoin to legalize it.

[Tyrantt]

This actually isn't that bad and the amount is ok aswell, tho this just might mean that the bigger players would be using some different exchanges to avoid taxation... and let's be honest, did u ever pay a tax when you sold something on amazing or ebay?

[Opquar]

This actually isn't that bad and the amount is ok aswell, tho this just might mean that the bigger players would be using some different exchanges to avoid taxation... and let's be honest, did u ever pay a tax when you sold something on amazing or ebay?

Lol this is true. You could just split it into different transactions. Also, you are paying taxes on amazon and ebay. They're included in the base price.

[barabut]

https://www.coindesk.com/us-lawmakers-seek-tax-exemption-bitcoin-transactions-600/

Two members of the US House of Representatives have filed a bill seeking to create a tax exemption for purchases made with cryptocurrencies.

Back in 2014, the Internal Revenue Service declared that it would consider bitcoin (and other cryptocurrencies) as a kind of property for tax purposes. Any profits made when selling or exchanging a cryptocurrency triggers a capital gains requirement. Yet due to the wording of the IRS decision, that covers any transaction involving bitcoin, including an oft-mentioned purchase of a cup of coffee – essentially meaning that if you bought some bitcoin at $1, and spent it on a $2 cup of coffee, you would owe tax on the difference.

Reps. Jared Polis and David Schweikert, who co-lead the Congressional Blockchain Caucus, are hoping to alleviate some of the issues resulting from that ruling with the Cryptocurrency Tax Fairness Act.

Unveiled today, the measure, if passed, would create a de minimis exemption for cryptocurrency payments below $600 after December 31 of this year. Put more simply, transactions involving a cryptocurrency below that threshold wouldn't trigger a capital gains liability.

As the text of the bill states:

    "Gross income shall not include gain from the sale or exchange of virtual currency for 5 other than cash or cash equivalents….[if the amount of gain excluded from gross income under subsection (a) with respect to a sale or exchange shall not exceed $600."

Practically, as far as I know there is a study trying to get under the tax regime but currently again as far as I know there is no applicable tax system in any country start taxing it.

[yugyug]

It is a good news, aside from that the US being a role model of imposing tax about bitcoin transactions, other countries followed foot step, Japan as the first in Asia to impose tax for bitcoin transcations, the latest is Korea, South Korean's National Tax Services are discussing to lawmakers on imposing tax not just bitcoin but also in cryptocurrency, as it classified as assets and profits, any transactions of all cryptocurrencies is subject for tax due.

[talkbitcoin]

this is kind of an old news, and i heard it elsewhere. this is more like a proposal now. they have not yet accepted it. but this is a very logical and good one at that.
additionally other countries have already done something like that. if i am not mistaken Japan completely removed the taxes on bitcoin payments. which means it doesn't matter what size it is. it can be $600 or it can be $600 million you still won't pay taxes if you use bitcoin.