Tax proposals meant to reduce burdens among crypto users, including one that would waive capital-gains calculations for small-scale transactions, didn’t make it into President Donald Trump’s marquee budget bill but are now being pursued as standalone legislation in the U.S. Senate.
Senator Cynthia Lummis, who leads the crypto subcommittee within the Senate Banking Committee, introduced the bill on Thursday to address a number of the digital assets sectors’ chief taxation complaints. The legislation would set a threshold of $300 on crypto transactions that would need to factor into a users’ tax calculations, freeing up people’s small, day-to-day transactions from capital-gains headaches — limited to a total of $5,000 a year.
The effort would also eliminate double taxation on crypto given in staking, mining, airdrops and forks, tossing out the initial tax hit when the rewards are received and focusing only on taxing gains from the eventual sale. It would also address lending, wash sales, charitable giving and let dealers and traders choose to mark their assets to the current market value in their accounting.
“We cannot allow our archaic tax policies to stifle American innovation, and my legislation ensures Americans can participate in the digital economy without inadvertent tax violations,” Lummis said in a statement.
Lummis has launched this bill into uncertain waters. Getting Senate time devoted to solitary bills is a challenge in an already busy session, but adding to that complication is the fact that a number of other crypto matters are likely to take priority — including the two bills that would establish regulations for the U.S. crypto markets and stablecoin issuers. And another of her legislative campaigns to establish a federal bitcoin (BTC) reserve is also in the mix.
The Wyoming Republican has been at the forefront of crypto matters, but the top priority for the industry on Capitol Hill at the moment is the advancement of the bill to set rules of the road for how the government will oversee the digital assets markets. Lummis publicly agreed to hew to a deadline recently set by Senator Tim Scott, the chairman of the Senate Banking Committee, to deliver the market structure bill to Trump’s desk by the end of September.
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