7/26/2022 0 Comments
Senators Pat Toomey (R-PA) and Kyrsten Sinema proposed the "Virtual Currency Tax Fairness Act," a new bill with bipartisan support, in Congress on Tuesday (D-AZ).
By establishing a "tax exemption for small personal transactions," the bill seeks to "simplify the use of digital assets for everyday purchases," according to the statement made by the U.S. Senate Committee on Banking, Housing, and Urban Affairs.
As crypto currencies have the potential to become a common feature of everyday American life, Senator Toomey said, "Our existing tax code is an obstacle." He went on to mention:
“ 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
According to existing legislation, a taxable event occurs whenever cryptocurrency is used to pay for purchases of any amount.
If the value of the cryptocurrency increased, even just a little bit, the buyer would be responsible for paying capital gains taxes to the Internal Revenue Service (IRS) on the deal.
In accordance with the bill's text, the new law aims to "amend the Internal Revenue Code of 1986 to exclude from gross income de minimis earnings from certain sales or exchanges of virtual currency, and for other reasons."
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