US Lawmakers Try Again on Tax Relief for Small Crypto Payments

House Representatives’ bipartisan legislation would exempt realized crypto gains under $200 from taxation.

Jan 16, 2020 at 9:15 p.m. UTC
Updated Sep 13, 2021 at 12:09 p.m. UTC

U.S. lawmakers have resurrected a bipartisan push to exempt gains from small cryptocurrency transactions from being taxed. 

On Thursday, Reps. Suzan DelBene (D-Wash.), David Schweikert (R-Ariz.),  Darren Soto (D-Fla.) and Tom Emmer (R-Minn.) introduced “The Virtual Currency Tax Fairness Act of 2020,” an amendment to IRS tax code that would exempt realized gains under $200, otherwise known as a de minimis threshold.

From a practical standpoint the bill could simplify the tax burdens of day-to-day crypto users who must report even marginal capital gains under current federal law. This is based on a 2014 Internal Revenue Service guidance that treats bitcoin and other “convertible virtual currencies” as taxable commodities.

This legislation does not alter that bureaucratic determination, but it would provide relief for low-level use cases, like transactions, while enforcing it against more substantial users, like investors. 

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.

The bill would retroactively apply to all qualifying transactions from Dec. 31, 2019. 

Representatives have tried to push through similar legislation before. In 2017, Schweikert co-sponsored more ambitious legislation that would have placed the bar at $600. His bill never made it to committee – it died on the House floor.


Read more about
The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Sequoia's Guide to Surviving the 2022 Bear Market

Venture capitalists have gotten increasingly frantic over the last few months.

Venture capitalists have gotten increasingly frantic over the last few months.

CoinDesk - Unknown
2
CoinDesk - Unknown
NFT Art Museums Are a Good Idea

The metaverse turns galleries global, and helps fund the arts. This article is part of “Metaverse Week."

The metaverse turns galleries global, and helps fund the arts. This article is part of “Metaverse Week."

CoinDesk - Unknown
3
CoinDesk - Unknown
How the US Can Establish Itself as a Crypto Leader

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

CoinDesk - Unknown
4
CoinDesk - Unknown
No, the UK Is Not Going to Make USDC and USDT Legal Tender

For “legalize” read “regulate.”

For “legalize” read “regulate.”

CoinDesk - Unknown