Cryptocurrency Bill Reintroduces by US Congress

Overview-

• Bill on cryptocurrency transactions reintroduced by the US Congress.
• The original bill was introduced in the year 2017.
• Small cryptocurrency transactions exempted from the tax payment.

A cryptocurrency bill “The Virtual Currency Tax Fairness Act of 2020” was reintroduced today to exempt the taxes on cryptocurrency expenses under personal qualifications. The bill was introduced by Congresswoman Suzan Delbene of Washington and Congressman David Schweikert of Arizona. Earlier the original bill was introduced in the year 2017 with larger exemptions.

Currently, the existing cryptocurrency bill is not in much favour of the cryptocurrencies, I.e., the cryptocurrencies are considered to be investments and commodities, and many of the other time as currencies. The new bill simplifies the cryptocurrencies for both the traders and the users.

And according to the new bill, if a user gains are not more than $200, he is exempted from the tax payment. Earlier, the limit was higher. It was $600. The Bill says, “Gross income of an individual shall not include gain, because of changes in exchange rates, from the disposition of virtual currency in a personal transaction (as such term is defined in section 11 988(e)). The preceding sentence shall not apply if the gain which would otherwise be recognized on the transaction exceeds $200.”

And these will be covered for all the transactions that have happened after December 31st, 2019. At the end of last year, I.e., 2019, eight members of the US Congress sent letters to the Internal Revenue Service (IRS) requesting for further clarifications on the cryptocurrency laws. Since the laws seemed to be ambiguous. The letter also pointed out the lack of clarity in certain points such as the cryptocurrency-based financing that included future trading and the interest earned from these virtual currency deposits.