[2017-09-07] US Lawmakers Seek Tax Exemption for Bitcoin Transactions Below $600

[ivanpoldark]

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."

In an interview with CoinDesk, Jerry Brito, executive director of the DC-based nonprofit Coin Center – which helped advocate for and organize the bill – compared the move to one taken previously by Congress to create an exemption for purchases made using foreign currency.

"What we have done with this bill is do something very similar, to create a de minimis exemption for small purchases."

As for the prospects of the bill in a Congress beset by Republican infighting and looming fights over the federal government's funding and ability to borrow, Brito struck a cautiously optimistic tone, pointing to the ongoing effort to reform the US tax system as aligning with the goals of the new bill.

"This should be unobjectionable to members of the Congress," he said.

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

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[kjlimo]

very cool!

[BellaBitBit]

This is good news, I hope that it continues through without a problem.  I am thinking that 4th quarter 2017 and most of 2018 will have a lot of regulatory action and definitely more discussion within world governments.  At least the US is not talking about bans.

[BitHodler]

It may seem like a low amount initially, but considering that most of the people don't even have that much worth of crypto to begin with, it may turn out to be a stimulance for people to freely spend their coins without headache.

But we shouldn't start cheering too soon. As long as it hasn't gone through successfully, all good hopes will go to waste directly. I will only take it for real once it becomes reality, and till that time, words alone hold no value.

[CryptoBry]

This is good news, I hope that it continues through without a problem.  I am thinking that 4th quarter 2017 and most of 2018 will have a lot of regulatory action and definitely more discussion within world governments.  At least the US is not talking about bans.

Yes, in USA though the government is not openly encouraging the people to buy/own/use Bitcoin there are some lawmakers who are aware of the great potentials posed by cryptocurrency and they are working some rules and regulations to define and redefine the game. I am hoping that eventually USA would partner with Japan in leading the cryptocurrency world as we should start to disconnect from China (now the source of many bad news). We still have many things to thanks America for.

[LevshaK1]

This is good news, I hope that it continues through without a problem.  I am thinking that 4th quarter 2017 and most of 2018 will have a lot of regulatory action and definitely more discussion within world governments.  At least the US is not talking about bans.

Yes, in USA though the government is not openly encouraging the people to buy/own/use Bitcoin there are some lawmakers who are aware of the great potentials posed by cryptocurrency and they are working some rules and regulations to define and redefine the game. I am hoping that eventually USA would partner with Japan in leading the cryptocurrency world as we should start to disconnect from China (now the source of many bad news). We still have many things to thanks America for.

I also like the fact that the US government is loyal to bitcoin and does not prohibit it.
This will enable bitcoin to develop in this country

[richardsNY]

In general, the majority of the cryptocoiners don't really bother to think about paying tax over their purchases and gains, which is quite understandable to be honest. As long as you aren't declaring anything, the government doesn't know you actually hold whatever crypto currency. The only potentially negative aspect is that exchanges may be playing your information to the IRS secretly. It will take many years before people honestly going to declare their holdings/gains and everything -- people simply don't feel the rush to do so.

[btcton]

This is good news, I hope that it continues through without a problem.  I am thinking that 4th quarter 2017 and most of 2018 will have a lot of regulatory action and definitely more discussion within world governments.  At least the US is not talking about bans.

Yes, in USA though the government is not openly encouraging the people to buy/own/use Bitcoin there are some lawmakers who are aware of the great potentials posed by cryptocurrency and they are working some rules and regulations to define and redefine the game. I am hoping that eventually USA would partner with Japan in leading the cryptocurrency world as we should start to disconnect from China (now the source of many bad news). We still have many things to thanks America for.

I also like the fact that the US government is loyal to bitcoin and does not prohibit it.
This will enable bitcoin to develop in this country

Ehhh, I would not quite say that the government is loyal to Bitcoin. Sure, they don't prohibit it or ban it, but that is mostly because it would likely bring attention to it and because of the repercussions that passing a banning law against something as basic as a cryptocurrency would bring. In the government's eyes, Bitcoin is something they can quite literally not control like the dollar. They can't create any of it or devalue it like they can do with the dollar and therefore cannot create value if they need to. It is basically a digital version of gold in their eyes. On the bright side, once Bitcoin does become popular, it will be impossible to stop it or any sidechain that may develop and a small amount of regulation through taxation and exemptions will be what keeps them from breaking down, as you can see from this piece of news.