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The U.S. Senate has been introduced to a new bipartisan bill that would ease the use of cryptocurrencies in everyday purchases by creating tax exemptions for personal crypto transactions under $50 and capital gains under $50.
On Tuesday, Senators Pat Toomey (R) and Kyrsten Sinema (D) proposed the new bipartisan bill in Congress called the “Virtual Currency Tax Fairness Act”.
According to a statement by the U.S. Senate Committee on Banking, Housing, and Urban Affairs, the bill aims “simplify the use of digital assets for everyday purchases” by offering “tax exemption for small personal transactions.”
Senator Toomey commented, “While digital currencies have the potential to become a normal part of everyday life for Americans, our current tax code is holding us back.” He added:
“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.”
Under applicable law, a taxable event occurs when cryptocurrency is used to pay for a purchase of any amount. If a cryptocurrency appreciates, even by a fraction of a cent, one will owe the IRS for trading capital gains.
The new legislation aims to “amend the Internal Revenue Code of 1986 to exclude from gross income de minimis gains from certain sales or exchanges of virtual currency, and for other purposes,” the bill’s text reads.
The announcement continued:
“The Virtual Currency Tax Fairness Act would simplify the use of digital assets for everyday transactions by creating a sensible de minimis exemption for gains of less than $50 on personal transactions and for personal transactions under $50.”
The long anticipated bipartisan crypto bill in the making by U.S. Senators Cynthia Lummis (R) and Kirsten Gillibrand (D) was recently postponed to next year. The bill’s will provide clarity on the roles of the two key U.S. market regulators and liberate crypto miners from being marked as broker-dealers relieving them from unfair taxations.