US Lawmakers Seek Tax Exemption for Bitcoin Transactions Below $600

[krishnapramod]

Cryptocurrency Tax Fairness Act of 2017 was iintroduced yesterday by Democratic Rep. Jared Polis and Republican Rep. David Schweikert. If this bill gets passed then it would create a tax exemption for cryptocurrency payments below $600 after December 31 of this year. It reduces the tax burden of small value transactions thus allowing consumers to indulge in small purchases without worrying about capital gains.

Despite its sky-high value, there are many barriers to using Bitcoin for normal things like buying a coffee or groceries. Some of these obstacles are technical, and some social, but a big one has always been the question of taxes.

Right now, every single Bitcoin transaction in the US, no matter how small, must be recorded and later reported to the government in order to pay a capital gains tax.

The Cryptocurrency Tax Fairness Act of 2017, introduced Thursday by Democratic Rep. Jared Polis and Republican Rep. David Schweikert, would remove this requirement for any Bitcoin transaction under $600 USD. If passed, this law would mean that average folks can use Bitcoin to pay for most things without keeping track of every single purchase and later having to pay capital gains tax on their cryptocurrency.

https://motherboard.vice.com/en_us/article/mbb8jv/lawmakers-introduce-bill-that-will-let-you-buy-coffee-with-bitcoin-without-paying-capital-gains-taxes

https://polis.house.gov/news/documentsingle.aspx?DocumentID=398438

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[TheQuin]

That's a very positive step, good to lawmakers finally getting to grips with the implications of Bitcoin. But I wonder what chance it has of being passed into law. Does it have widespread support?

[darkangel11]

It's nice to see democrats and republicans working together for the good of cryptocurrencies.
The exemption is of course very reasonable, but I doubt they will let it pass, as these things are thought to reduce the money flowing into the vault.
In reality it would only make it easy for young people, who count every penny, to get into cryptocurrencies and earn from it without having to worry about the taxes eating away their profit.

[GreenBits]

while I generally am positive about this development, I have a few concerns;

for the sake of political lobbying/donations, what are the ramifications of this? if/when they allow cryptos to be donated to political campaigns/ lobbying funds/ political action committees, will donations of this size also be exempted from reporting requirements?

if i constantly make transaction under 600, but never excede it (i rarely buy 600 dollar items), will i be exempt from reporting period?

how will they combat intentional "smurfing", given that the exemption threshold is known, and, will this mean that all transactions will need to be reported?

[DanetonBit]

so what do they want us to do?

[Marry Finch]

This is a very necessary and timely bill. Also, the minimum transaction amount of $ 600, which will not be taxed, is also impressive. Virtually all household transactions will not be taxed. If desired, you can make a series of transactions for $ 599 and the total amount will also not be taxed.