Bipartisan Bill Seeks To Eliminate Taxes on Crypto Transactions Under $50 (decrypt.co) 55
A bill was introduced in the Senate today that would prevent Americans from needing to disclose capital gains or losses on most smaller-scale crypto transactions. From a report: Introduced by senators Patrick Toomey (R-PA) and Kyrsten Sinema (D-AZ), the Cryptocurrency Tax Fairness Act would exempt reporting crypto transactions of less than $50, or trades in which a person earns less than $50. "While digital currencies have the potential to become an ordinary part of Americans' everyday lives, our current tax code stands in the way," said Toomey, adding that the bill would help Americans "use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee." Right now, similar bills are working their way through Congress. The Responsible Financial Innovation Act, introduced by senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY), would remove the obligation to provide information on crypto gains of $200 or less to the Internal Revenue Service.
See, lobbying does pay off.. (Score:5, Insightful)
This is what you get when you spend lots of $$$ on lobbying. Although Kristen is a mock Dem when you look at her stance.
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yeah really disappointed in her lack of knowledge or wisdom.
Uh-oh (Score:2)
When the party of evil and the party of stupid agree on something, you know it's going to be evil and stupid. Yeah, that about sums up cryptocurrency nicely.
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this is a special turd being polished by both sides.
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Yep, crypto is just a scam used by big capitalism and drug smugglers. Wise investors should stay far away until the market shakes out.
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I have yet to see Bitcoin hold value. An asset that experiences 60% drops is not a good asset. It's better than Venezuela's money, sure, but Venezuela is run by an incompetent idiot.
Bitcoin is also an energy nightmare- its value doesn't cover the energy costs needed to maintain the blockchain.
Lobbysists and other scumbags. (Score:5, Informative)
Look whose names also appear here, and why. [opensecrets.org]
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Yeah, no one is using cryptocurrency to "buy a cup off coffee". In fact, I'm probably going to get a cup of nitro cold brew right now if the local Starbucks has finally fixed their dispenser, and I'll be paying for it using good old fashioned fiat currency, via the cashier scanning a barcode on my phone. There is absolutely no way that involving cryptocurrency would make that process any easier.
The reason the cryptocurrency industry hates regulation is because the entire thing is one big self-resetting py
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There is absolutely no way that involving cryptocurrency would make that process any easier.
Or faster.
So maximum transaction amount? (Score:2, Insightful)
So all this is doing is setting a maximum transaction amount that people will then split up crypto transactions into to be able to avoid taxation and reporting? They do understand it would be trivially simple to just break up a transaction right? right?
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The term used for bank transactions under the $10,000 reporting limit is called Structuring. And those who do it can be investigated and get into trouble even if individual transactions are each below the threshold.
I wouldn't be surprised if, given the information-systems-centric nature of cryptocurrency, efforts are put into analyzing the publicly-reviewable blockchain history to find when this happens.
Re:So maximum transaction amount? (Score:5, Informative)
Those who are investigated for structuring were turned in by their banks who are obligated to file Suspicious Activity Reports for such transactions. The govt would have to mandate every exchange start doing the same and that would mean an invasive level of KYC (a.k.a. no more anonymity, at all). You good with that?
The exchanges won't be. They'll go out of business first. Any legit level of financial reporting would put the exchanges out of business (and most of the people involved with them in prison).
Exchanges already to KYC for Americans (Score:3)
Those who are investigated for structuring were turned in by their banks who are obligated to file Suspicious Activity Reports for such transactions. The govt would have to mandate every exchange start doing the same and that would mean an invasive level of KYC (a.k.a. no more anonymity, at all). You good with that?
The exchanges won't be.
Exchanges catering to Americans already have KYC requirements, and regulations for transaction reporting passed in 2021 [eidebailly.com].
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Oh please. They do zero checking unless they need to delay a withdrawal then they'll demand all your docs. Exchanges do nothing to stop VPN's. Tether is banned in NY state yet all the exchanges still have a massive presence in NY state. Go figure, huh.
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The losses incurred by people obsessively seeking to reduce their taxation profile is incredible when you look at it.
Betcha we find two senators invested in crypto (Score:3, Interesting)
I mean seriously what is this for other than to encourage people to buy up tokens and keep the bottom from falling out?
Who is this really for otherwise? Why not exempt dollar transactions under $50 from federal taxes? Would be just as good for financial literacy and skills to let Americans play with penny stocks and cheap options without having to deal with the taxes right?
Meanwhile municipalities are hurting, so pushing transactions like buying a cup of coffee into untaxes crypto does what other then further deprive them of needed sales tax revenue? Sounds like a great policy decision right there! Well it does one thing we have Demorats and RINOs on this bill so the game probably is starve localities so they can then do bailouts with federal monies and lots of strings attached. Sure Uncle Sam will pickup the cost of your county library , as long you host Drag Queen Story hour and provide gender neutral rape^H^H^H^HBathrooms.
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Who is this really for otherwise?
It's so people can make political donations using crypto w/o having to report any financial gains on the transactions.
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we have Demorats and RINOs on this bill so the game probably is starve localities so they can then do bailouts with federal monies and lots of strings attached.
You seem slightly confused about which party favors lowering taxes and cutting back social services.
Also, bailouts are usually bi-partisan and almost never have strings attached. I'm assuming you skipped over all those news stories about people who started fake businesses to claim all that paycheck protection Covid money the previous administration gave away as "fully forgivable loans".
Cryptocurrencies aren't special (Score:2)
They should be treated like any other asset (or possibly as a "foreign currency") with respect to capital gains taxes.
If you are going to tax when I spend $49.99 to buy Euros or gold or stocks or sell those things in exchange for under $50, you should do the same if I buy or sell bitcoin.
If you don't, then don't.
Cryptocurrencies aren't special.
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If anything, there should be a "carbon tax" on those cryptocurrencies which use high-energy-cost transactions, but that's a discussion for another time.
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Cryptocurrencies have seen ballooning in value more like how stocks are held and traded though.
The IRS says that crypto *is* special (Score:5, Informative)
They should be treated like any other asset (or possibly as a "foreign currency") with respect to capital gains taxes.
As an American, you don't pay capital gains tax when you buy a coffee in France using euros. Because euros are considered currency. The whole reason this bill exists is because the IRS considers crypto to be property, not a currency. So if you buy a coffee with BTC, you have a capital gain or loss. This makes using crypto for ordinary transactions a tax reporting nightmare. You'd need to figure out which of you BTC you're spending and record the USD value of the coffee purchase. With currency, you just change your USD to EUR and then start spending.
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"As an American, you don't pay capital gains tax when you buy a coffee in France using euros."
As an American, you *do* pay capital gains if you buy euros with dollars for the purpose of selling the euros later for more dollars than you spent to buy the euros.
There is an exemption for personal transactions under $200, so the only question is by cryptocurrency would have a lower exemption limit.
I think states are going to want sales tax on the (Score:2)
I think states are going to want sales tax on the $50 and under transactions
Re:I think states are going to want sales tax on t (Score:4, Informative)
I think states are going to want sales tax on the $50 and under transactions
This is about reporting any gains/losses resulting from the exchange of crypto to fiat currency to buy something. It would be like selling a stock to buy a cup of coffee. There would be a financial gain/loss on the sale of that stock. That said, states might be interested in that gain/loss come tax time even if the Fed isn't.
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This is on the income side for the seller. Banks still report interest income on checking accounts even if you spent it all by writing checks. I don't see why the exchanges can't be made to responsibly report income as well, oh that's right they aren't regulated yet.
This is a blatant attempt to add a loophole to the tax code.
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Not with crypto. Every crypto transaction is a taxable event for both the buyer AND the seller. Every single transaction.
Is this for each transaction? (Score:5, Insightful)
Because all you would have to do is piece out transactions and send multiples.
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The gas/transactions fees on the most valuable blockchains (i.e. BTC/ETH) tend to make this impractical. Splitting up transactions into multiple small amounts means that you'd lose more in fees than you'd save on taxes.
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Existing well-known block chain crypto may have that limitation. Seems like a currency designed to use the $50 as a loophole might not have that speedbump in its way.
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Oh absolutely. There can still be negative consequences to this unnecessary legislation. It just isn't as much of a gimmie as it first appears for the bulk of the crypto market.
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So it's an cryptocurrency exchange bailout bill.
Bipartisan? (Score:3)
Introduced by senators Patrick Toomey (R-PA) and Kyrsten Sinema (D-AZ), ...
Sinema is more of a Republican than Democrat, but mostly she's a wannabe Instagram influencer posing as a Senator.
loopholes (Score:2)
just keep cutting those "laws for thee, not for me" loopholes in the tax laws...
after all, they've done SUCH good things for us in the past.
Tax fairness my ass. (Score:2)
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If we are going to ignore small income...
But the bill doesn't exempt income. From the text:
So if you're paying for a coffee with BTC, then no captial gains tax would app
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If such a thing passes, there will suddenly be car purchases with finance terms where you can pay daily car payments via bitcoin such that the payment is under $50 per day.
What about sales tax (Score:2)
Good news (Score:2)
There already is no sales tax at the federal level. The senators don't need to do a thing.
laser focused (Score:3)
So...algorithmic selling now? (Score:3)
So it'll take what...10 minutes to write a program that sells large volumes of crytocurrency in $50 chunks to zero out tax liability? Do we have a winner?
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First thing that came to mind- I'll buy a car and I'll pay for it in 900 payments of $50 each.
Voila, no tax.
How about something meaningful? (Score:2)
How about stopping the practice of allowing states to constantly re-tax you annually on the value of your home, vehicle, or other already purchased assets? It's not like you didn't get taxed when you bought them originally!
Who is sponsoring this? (Score:3)
My first reaction was, "Who is this crypto lobbyist named Bipartisan Bill?"
Does he know Charles Ponzi?
Two of the most corrupt senators (Score:2)
"Fairness Act"? How is this fair? (Score:2)
it makes sense if you think about it (Score:2)
The crypto ecosystem has to pay miners $50 per transaction, so transactions that small are essentially a wash.
Buying a pizza (Score:2)
Today, in theory, each time you buy a pizza or order a meal, you have to report this on your taxes.
Your BTC will act like a foreign currency, and every transaction is either a gain or a loss. You bought $40 worth of pizza and soda, but that $40 BTC was bought for $39 yesterday, hence you had $1 gain. That was supposed to be reported before this new deal.
The same is also technically true for spending Euro or other cash. But nobody will ask for your receipts of your time in Barcelona airport.