Washington Representative Suzan DelBene reintroduced a bill that aims to exempt crypto users from taxes on transactions under $200.
Suzan DelBene – Washington Representative
Called the Virtual Currency Tax Fairness Act of 2022, the bill is seeking to amend the Internal Revenue Code of 1986 to exclude tax collection from certain individual cryptocurrency transactions.
If signed into law, the measure could prevent the Internal Revenue Service (IRS) from requiring U.S. tax preparers to pay taxes on capital gains from transactions of $200 or less.
“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. Virtual currency has evolved rapidly in the past few years with more opportunities to use it in our everyday lives. The U.S. must stay on top of these changes and ensure that our tax code evolves with our use of virtual currency.”
In 2017, Representative David Schweiker proposed a bill to exempt crypto transactions under $600 and co-authored the current version with DelBene. The two lawmakers reintroduced the bill of the same name in 2020, lowering the threshold to $200. Crypto representatives Darren Soto and Tom Emmer co-sponsored the 2020 bill as well as the most recent iteration.
“As consumers increasingly use cryptocurrencies to complete everyday transactions, we must modernize their tax treatments. This bill will eventually allow Americans to use digital wallets as seamlessly as cash,” said Emmer.
With tax season approaching in the United States, many crypto users are responsible for reporting profits from crypto holdings.
However, ordinary people do not pay capital gains tax while still HODL, but only when they sell, exchange or transfer tokens. The proposed bill suggests changes to the tax code that would apply to transactions made after December 31, 2021.
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