U. S. Congress proposes to free small cryptocurrency transactions from taxes

[hugeblack]

A bill has been prepared entitled "‘Virtual Currency Tax Fairness Act of 2020"^[1] which proposes to exclude cryptocurrency transactions of less than $ 200 from the tax base.
It is a change to the prevailing definition of cryptocurrencies as it is a form of private ownership and therefore any transactions must be subject to income tax.
The reasons for this, according to the opinion of the legislators, are the changes in the exchange rates in the per capita income. The previous sentence does not apply if the profit exceeds $ 200.

Read more and source ---> https://coinworld360.com/u-s-congress-proposes-to-free-small-cryptocurrency-transactions-from-taxes/

[1] https://coincenter.org/files/2020-01/delben-049-xml-final.pdf

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[CryptoBry]

A bill has been prepared entitled "‘Virtual Currency Tax Fairness Act of 2020"^[1] which proposes to exclude cryptocurrency transactions of less than $ 200 from the tax base. It is a change to the prevailing definition of cryptocurrencies as it is a form of private ownership and therefore any transactions must be subject to income tax. The reasons for this, according to the opinion of the legislators, are the changes in the exchange rates in the per capita income. The previous sentence does not apply if the profit exceeds $ 200.

This bill if approved can be a good law that can be a big boost to the whole cryptocurrency industry. Had there been a united voice of the cryptocurrency industry, this is one legislative move that is really worth of our support. Let's hope that this will not be just gathering dust in the archive of Congress so there is a need for support from other legislators. In fact, we need a more comprehensive bill that can cover many aspects of the whole cryptocurrency industry so that vague and undefined aspects can be given more illumination with the end view of spurring more growth as well as proper recognition of the industry, and of course with corresponding responsibilities and accountability.

[squatter]

A bill has been prepared entitled "‘Virtual Currency Tax Fairness Act of 2020"^[1] which proposes to exclude cryptocurrency transactions of less than $ 200 from the tax base.

The wording of the bill is slightly confusing -- it makes it sound like all transactions valued under $200 will be exempted. I'm fairly sure that's not the case, based on these articles:

https://www.law360.com/fintech/articles/1235320
https://www.coindesk.com/us-lawmakers-try-again-on-tax-relief-for-small-crypto-payments

Rather, up to $200 per year in personal transactions will be exempted. That's why Neeraj Agrawal is talking about such small amounts:

Neeraj Agrawal, director of communications for Coin Center, which lobbied the representatives on this bill, said it takes some pressure off everyday users.

"Extending this sensible exemption to cryptocurrency would allow users to do simple things like send small transactions to each other or fractions of pennies to dapps without having to deal with a fairly complicated capital gains calculation every time,” he said.

[Lucius]

This bill if approved can be a good law that can be a big boost to the whole cryptocurrency industry.

Big boost because crypto users will not have to pay tax on transactions that do not exceed $200 in total per year? You have to be kidding me, this is not a third world country where $200 means something, and this can only help total beginners who collect coins from faucets or send each other a tips in Doge. I do not see how European laws made a big boost because they allowed anonymous cards (250 EUR) per user, or selling/buying crypto up to a certain amount without any ID even on a daily basis. Your statement that it will help "whole cryptocurrency industry" is complete nonsense.

[d.kevin29]

The wording of the bill is slightly confusing -- it makes it sound like all transactions valued under $200 will be exempted. -snip

Big boost because crypto users will not have to pay tax on transactions that do not exceed $200 in total per year? -snip

Never studied the US Law and I'm not very familiar with the English legal language either, but the proposed bill states the following: "The preceding sentence shall not apply if the gain which would otherwise be recognized on the transaction exceeds $200.", and it really confuses me too. Is it yearly, monthly or per transaction gain? Wouldn't a "per transaction" case lead to the abuse of this bill by creating only sub-$200-profit transactions so all of them would be a subject to the stated exception? I'm pretty interested to know what a native American's view is regarding this bill and how they interpret it.

Here are the lines from this PDF for reference:

Code:

7  ‘‘(a) IN GENERAL.—Gross income of an individual
8  shall not include gain, by reason of changes in exchange
9  rates, from the disposition of virtual currency in a per10 sonal transaction (as such term is defined in section
11 988(e)). The preceding sentence shall not apply if the gain
12 which would otherwise be recognized on the transaction
13 exceeds $200. 

[malevolent]

Doesn't it say something different than the article and people here are understanding? My take is people won't have to pay taxes on transactions where they made $200 in profit or less. So if someone bought 1 BTC for $10000 and would buy something for $10150 after BTC price had increased to $10150, they wouldn't have to pay taxes on the $150.

[squatter]

Doesn't it say something different than the article and people here are understanding? My take is people won't have to pay taxes on transactions where they made $200 in profit or less. So if someone bought 1 BTC for $10000 and would buy something for $10150 after BTC price had increased to $10150, they wouldn't have to pay taxes on the $150.

Yes, up to a total of $200 in gains per year.

I am confident the IRC does not allow for endless de minimis tax exemptions taken in this manner, though. We can't just gain $199 per transaction over and over without triggering tax liability.

This is aimed at very small transactions and accordingly, very small gains.