Lummis’s bill is still being drafted from last year, but some proposals have already surfaced, including the exclusion of small transaction taxes in the United States.
Wyoming Senator Cynthia Lummis is one of the United States congressmen who are not only friendly with cryptocurrencies, but also investors. In fact, she is so enthusiastic about them that she has made interesting recent statements, for example, in February she called on the US Federal Reserve itself to invest in Bitcoin.
Now, in recent days, he has been revealing some of the content that the bill he is leading may have. In December he had already said that he would present the project in 2022. Now he has talked about some articles through TwitterIn addition, one of his companions in the management gave some broader statements to the media Decrypt about the topic.
The senator revealed in Twitter that one of your project proposals is Exclude Small Transaction Taxesin order to promote the participation of new investors, excluded from traditional banking and young people.
here your tweet:
“We must promote a more inclusive financial system. You can’t do that by enmeshing new entrants (especially the young, underserved, or unbanked) in mountains of reporting and compliance. Therefore, a provision to eliminate taxes on the delta of the value of digital assets for small purchases < $600.”
We ought to foster a more inclusive financial system. You can’t do that by looking at new entrants (especially the young, underserved or unbanked) in mountains of reporting and compliance. Thus a provision to eliminate taxes on digital asset value delta for small purchases < $600. https://t.co/u2ONmVVkMd
— Cynthia Lummis ???? (@CynthiaMLummis) March 14, 2022
However, there are other parts of the content of the proposal that have been revealed that in the opinion of some members of the crypto ecosystem are more important. For example, this is what James Yochum, an expert consultant on crypto, real estate and taxes says (retweeted by the senator):
“The real news here is not a $600 waiver for crypto earnings, the news is:
It is a bill that will clarify mining and staking as productive activities, and…
They are NOT a taxable event.
Income will not be realized until the DISPOSAL of the asset!
Great news for stakers and miners”
The real news here, is not a $600 exemption for crypto gains, the news is:
It’s a bill that will clarify mining and staking as productive activities, and…
NOT a taxable event.
Income will not be realized until DISPOSTION of the asset!
Great news for stakers and miners! https://t.co/7ExadWYkud
— James Yochum, CPA (@JTheAccountant) March 14, 2022
We clarify that the Responsible Financial Innovation Law is still being drafted. But Lummis state policy director Tyler Lindholm told the podcast medium The Decrypt Daily that the legislation will provide clarity to the industry and users. One of its main goals is to provide guidance on capital gains related to crypto mining and stake. “What we’re really looking at there is just integrating digital assets into the tax system,” said.
Regarding taxes, the project plans:
First, it would provide a tax exclusion of up to $600. While Lummis would prefer that exclusion to be higher, according to Lindholm, the exact amount could actually end up being lower; since the senator wants to make a project that can be approved by the Senate.
Second, the bill would clarify that capital gains do not apply to “productive” activities such as mining or staking because the asset is not being sold.
“The current gray area is that you could be accumulating a capital gains taxable event under proof of stake as it stands now, even if you are just delegating.”Lindholm said.
This is not theoretical. the guide ofl Internal Revenue Service on this topic does not mention participation, but states that Bitcoin and other proof-of-work cryptocurrenciesare taxed as income from the day they are drawn. A Kentucky couple, who paid taxes on staking rewards from Tezos, sued the IRS in federal court over this matter.
The bill would also allow people Exit retirement schemes like 401(k)s or IRAs and reinvest the money in cryptocurrencies without a big tax bill.
Finally, it seeks to codify Lummis and Senator Ron Wyden’s failed amendment to the infrastructure bill signed into law last year. According to industry advocates, and Senator Lummis, a provision within that bill that redefined “intermediaries” to include crypto actors was too broad; could be read to require miners of Bitcoin and proof-of-stake validators provide the IRS with tax information from other network users. The Responsible Financial Innovation Law would redefine “runner” to make it clear that while exchanges and custodians are brokers, most other actors are not.
On the executive order the president
As we said, the senator is a faithful defender of crypto. For example, last week, when President Joe Biden released the long-awaited executive order on digital assets, the senator’s response was as follows (published on his institutional website):
“It is fantastic to see the Biden administration’s growing interest in digital assets, and while I agree with the president’s desire to combat money laundering and defend the national security of the United States, I believe his executive order overlooks the fact that the vast majority of users of digital assets respect the law and try to improve our financial system. If in doubt, you should look to Wyoming, where digital assets are booming within a balanced and common sense regulatory framework.”
He added: “We need thoughtful rules on stablecoins, and while I remain unconvinced of the need for a central bank digital currency (CBDC), I will continue to closely follow the Fed’s work in this area. I will be laying out my own thoughts on digital asset legislation imminently. Congress is ultimately the arbiter of these issuesand it’s time for us to step up our talks and work on real legislation.”
MRT report, DailyBitcoin
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