The “Tax Equity Law for Virtual Currencies” seeks to exempt tax obligations for Bitcoin operations if the associated earnings are less than USD $200.
A new legislative proposal in the United States is seeking to reduce friction in the use of Bitcoin for everyday payments by eliminating taxes for small transactions with the cryptocurrency.
As reported Bitcoin Magazinea group of deputies presented this Thursday a bill that would exempt transactions from Bitcoin of tax liability if associated capital gains are less than $200. Current regulations require that any gains made from the sale of cryptocurrencies, regardless of their size or purpose, be declared as taxable income.
The bipartisan bill, titled “Tax Equity Law for Virtual Currencies“, was written by the Republican representative David Schweikert with the collaboration of Suzan DelBene, representative of the Republican Party. Representatives Darren Soto and Tom Emmer are listed as co-sponsors of the proposal.
“Outdated regulations on virtual currency do not take into account its potential for use in our daily lives, treating it more like a stock or an ETF [fondo cotizado en bolsa]“, DelBene said in an interview with the aforementioned medium; and he added:
However, virtual currency has rapidly evolved in recent years with more opportunities to use it in our daily lives. This common sense bill cuts red tape and opens the door for more innovation, ultimately growing our digital economy.
Project seeks to promote the use of Bitcoin for everyday payments
The publication emphasizes that, for the purposes of the law, the use of Bitcoin and other cryptocurrencies as payment methods involve a sale to the US Internal Revenue Service (IRS), as the payer disposes of a portion of their digital currency holdings in exchange for a good or service.
If the funds that were spent had been purchased at a lower US dollar price, the difference would be characterized as capital gains, which would be required to be reported and taxed, he says. Bitcoin Magazine.
As such, the bill seeks to amend the Internal Revenue Code of 1986 to eliminate such requirements when the realized capital gain does not exceed $200. In this regard, the regulations specifically target smaller transactions in an attempt to encourage, or at least provide greater facilities for the use of Bitcoin as a payment mechanism.
“This legislation is an important step forward and lays the foundation for the growth of the digital economy”, highlighted Schweikert in a statement cited in the report. The proponent continued:
Virtual currency is reshaping our daily lives, and the United States must recognize this and work to treat these currencies fairly in our tax code.
According to public records of the US Congress., said legislative amendment proposal was initially introduced in January 2020. At that time, the bill was referred to the House Ways and Means Committee.
As of press time, none of the lawmakers have recently shared or commented on the proposal on their social media channels. Nor have they been particularly enthusiastic about Bitcoin in the past, except for Emmer, who on Twitter has repeatedly demanded a clear answer from the Securities and Exchange Commission (SEC) Chairman Gary Gensler on the denial of approval of an ETF from Bitcoin cash; a topic that has historically been of great interest within the crypto community.
— Tom Emmer (@RepTomEmmer) January 3, 2022
Article by Hannah Estefanía Pérez / DailyBitcoin
Unsplash image edited in Canva
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