A new bipartisan bill has been introduced in the US Senate that would exempt crypto transactions under $50 from being taxed.
Crypto trading has become an increasingly complex activity in the US, from a tax standpoint, with individuals needing to report even the smallest transaction. Senators Patrick Toomey and Kyrsten Sinema have introduced a bill that would make things much easier, exempting transactions under $50 or transactions where earnings are 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 Senator Toomey. “The Virtual Currency Tax Fairness Act will allow Americans to use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee.”
“We’re protecting Arizonans from surprise taxes on everyday digital payments, so as use of digital currencies increases, Arizonans can keep more of their own money in their pockets and continue to thrive,” said Senator Sinema.
The bill would significantly ease challenges involved in everyday crypto, challenges the Senators highlight:
Under current law, every time a digital asset is used, a taxable event occurs. For example, if an individual uses digital assets to purchase a cup of coffee, the individual would owe capital gains on the transaction if the digital asset appreciated in value—even if the asset appreciated by only a fraction of a penny. The Virtual Currency Tax Fairness Act would simplify the use of digital assets for everyday transactions by creating a sensible de minimis exemption for gains of less than $50 on personal transactions and for personal transactions under $50.
Should the bill pass, it’s a safe bet it will be welcomed by many.