• Senators Toomey and Sinema offer legislation that would exempt minor cryptocurrency transactions from capital gains taxes

  • A new bill has been introduced in the Senate that would exempt modest crypto transactions from capital gains taxes.

    Senators Pat Toomey and Kyrsten Sinema have presented the Virtual Currency Tax Fairness Act, which offers a de minimis exemption from reporting taxes on crypto purchases, according to a statement.

    Currently, crypto users in the United States are compelled by law to record gains on the value of crypto that they spend, implying that crypto is primarily an investment rather than a form of payment. The IRS has not appeared to be interested in pursuing these little transactions, but crypto users have long requested legislative protection similar to that which currently exists for foreign currency usage within the US.

    The bill would apply to transactions worth less than $50, with a mechanism to raise that threshold in line with inflation. It also does not apply to crypto-to-fiat currency deals, and “any sales or exchanges that are part of the same transaction (or a series of connected transactions) shall be recognized as one sale or exchange.”

    The initiative has received support from several key members of the crypto lobby, including Coin Center, the Blockchain Association, and the Association for Digital Asset Markets.

    For the past two Congressional sessions, a similar bill setting the de minimis at $200 has been introduced in the House. A de minimis exemption for crypto transactions is also included in the omnibus crypto bill filed in June by Senators Lummis and Gillibrand, which was the first time such wording appeared in Senate legislation.

    However, the legislative calendar will be completed before the November midterm elections. Toomey is also not running for re-election, thus he will not be around to take up this issue in the next Congress.

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