House Democrats are hoping to close two possible loopholes within tax regulations for cryptocurrencies, according to a proposal published Monday.
According to a document published by the House Ways and Means Committee, which is headed by Rep. Richard Neal (D-Mass.), lawmakers believe they can fund fiscal priorities through some “corporate and international tax reforms.”
The pair of provisions intends to prevent individuals from reporting a tax loss by selling cryptocurrencies at a loss but immediately (meaning within 30 days) buying the same cryptocurrencies.
The other provision intends to ensure taxpayers properly report capital gains, even if they purchase an offsetting position on their investments.
The first provision states:
While the second states:
The Washington Post reported Sunday that these proposals anticipate raising $16 billion in tax revenue from the cryptocurrency sector.
The House document is intended to help support a $3.5 trillion infrastructure package Democrats hope to pass in the coming months. The “Build Back Better Act” is a cornerstone of U.S. President Joe Biden’s agenda, and has been championed by progressive Democrats in both the House and Senate.
The overall House is expected to vote on the bill in two weeks.
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