People don’t pay capital gains taxes every time they buy a slice of pizza or a cup of coffee using US dollars. But that’s not the case for consumers who want to use Bitcoin.
While crypto naysayers often criticize Bitcoin’s lack of mainstream traction as an everyday currency, supporters in Congress are pointing out the onus of having to pay short-term capital gains taxes when consumers use Bitcoin to purchase groceries and other incidentals, since Bitcoin and crypto are taxed like stocks.
Crypto advocacy group Coin Center reports that the bill, dubbed the “Virtual Currency Tax Fairness Act of 2020,” was introduced Thursday by Congresswoman Suzan Delbene of Washington and Congressman David Schweikert of Arizona with bipartisan support.
According to the bill, legislators propose to amend the Internal Revenue Code of 1986 and exclude from gross income a crypto gain when the cryptocurrency is used to make personal purchases.
The bill would exempt crypto transactions if the gain falls below $200.
“Gross income of an individual shall not include gain, by reason of changes in exchange rates, from the disposition of virtual currency in a personal transaction (as such term is defined in section 988(e)). The preceding sentence shall not apply if the gain which would otherwise be recognized on the transaction exceeds $200.”
If approved, the bill would cover transactions made after December 31, 2019.
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Source: Daily HODL
Original Post: US Congress Weighs Bitcoin for Coffee and Pizza, Introduces Virtual Currency Tax Fairness Act of 2020