A bill was introduced in the Senate today that would prevent Americans from needing to disclose capital gains or losses on most smaller-scale crypto transactions.
Introduced by senators Patrick Toomey (R-PA) and Kyrsten Sinema (D-AZ), the Cryptocurrency Tax Fairness Act would exempt reporting crypto transactions of less than $50, or trades in which a person earns less than $50.
“While digital currencies have the potential to become an ordinary part of Americans’ everyday lives, our current tax code stands in the way,” said Toomey, adding that the bill would help Americans “use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee.”
Right now, similar bills are working their way through Congress. The Responsible Financial Innovation Act, introduced by senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY), would remove the obligation to provide information on crypto gains of $200 or less to the Internal Revenue Service.
Currently, IRS regulations state that even the smallest of crypto transactions can amount to a capital gains event: “When you sell virtual currency, you must recognize any capital gain or loss on the sale, subject to any limitations on the deductibility of capital losses.”
The bill introduced today is a companion piece to the Virtual Currency Tax Fairness Act reintroduced in the House of Representatives earlier this year, which specified a “de minimis” capital gains exemption on crypto transactions with realized gains of less than $200. It is an amendment to the IRS’s current tax code.
The goal is to expand the use of cryptocurrencies, according to a statement from Suzan DelBene (D-WA), who introduced the bill alongside David Schweikert (R-AZ).
“Antiquated regulations around virtual currency do not take into account its potential for use in our daily lives, instead treating it more like a stock or ETF,” said DelBene. “This commonsense bill cuts the red tape and opens the door to further innovations, ultimately growing our digital economy.”