A bill seeking to exempt personal cryptocurrency transactions from taxation for capital gains has been reintroduced in the Congress of the United States.

What the bill looks to change

Called "The Virtual Currency Taxation Fairness Act of 2022," the neb would establish an exemption for virtual currency expenditures that qualify as personal transactions. Users would then non have to report instances when they spent crypto whose valued had changed relative to the U.Southward. dollar on solar day-to-day expenses.

Representatives Suzan DelBene (D-WA) and David Schweikert (R-AZ) introduced the bill today, January. xvi. Schweikert introduced an earlier version of this neb in 2022 that featured a essentially larger exemption.

Existing revenue enhancement law struggles to cope with cryptocurrencies, as they sometimes behave as investments, sometimes commodities, and sometimes just like other currencies. It is to this last type of transaction that the bill looks to simplify for crypto traders and users.

The electric current trouble and the earlier bill

Currently, the IRS could hold crypto users responsible for paying taxes on gains earned and realized unknowingly, based solely on the value of their crypto at a time of buy. Such a system would make utilize of crypto as currency incredibly cumbersome inside the U.South.

The newly reintroduced beak would exempt taxpayers from a reporting duty as long every bit the gains involved are under $200, which would mostly only apply with major purchases or wild bull markets. The earlier version of the bill put this number at $600.

The bill would insert a new category inside existing IRS exclusions from nomenclature as gross income.

Other issues with U.S. tax

Taxing cryptocurrencies has proved a major sticking point in the U.S. In Dec, 8 congresspeople sent a letter of the alphabet to the IRS request the taxation agency to clarify rules for reporting income due to hard forks or air drops.

Last year, just before the tax reporting deadline in April, 21 representatives sent a similar letter to the IRS, likewise dissatisfied with current clarity.