New bill tackles cryptocurrency taxes
Health care and taxes aren't the only issues members of Congress are thinking about. Yesterday, Reps. Jared Polis and David Schweikert introduced the Cryptocurrency Tax Fairness Act, which is supported by advocacy group Coin Center.
The bill has two goals:
Bitcoin purchases below $600: The bill would create a de minimis exemption for purchases of goods and services made with cryptocurrencies.
- Currently, people have to account for capital gains taxes on those even if they simply bought a cup of coffee.
- This stems from the IRS' decision in 2014 to view Bitcoin as property, which means that it's subject to capital gains taxes on profits.
Reporting guidance from the IRS: The bill's other aim is to force the Treasury Department to provide more reporting guidelines for cryptocurrency transactions to which capital gains taxes apply.
Our thought bubble:
Given the low likelihood that Bitcoin will become a mainstream means of purchasing, say, coffee, this bill feels a bit unnecessary. But at the same time, it's also common sense: There's no point in the IRS turning such negligible transactions into a hassle for Bitcoin enthusiasts.
- More broadly, as cryptocurrency trading is surging in popularity, clearer guidelines from the IRS can only be helpful for investors and the industry.
- And it would have helped avoid situations such as the IRS' recent summons of customer data from digital currency exchange Coinbase because it suspects many have skipped on paying their taxes.