House of Representatives introduces crypto tax bill

08 Aug 2019

Crypto regulations The U.S. House of Representatives has introduced a tax bill aiming to permit the omission of gain or loss on “like-kind” digital currency exchanges.

A report by Coin Telegraph on Thursday stated the tax bill, called the “Virtual Value Tax Fix Act of 2019” was introduced last month by Rep. Ted Budd and referred to the Committee on Ways and Means. 

The bill plans to establish amendments to the Internal Revenue Code of 1986, which specifically states: “No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment.”

The so-called Virtual Value Tax Fix Act of 2019 is pursuing “the exchange of virtual currency for virtual currency of like kind shall be treated in the same manner as the exchange of real property for real property of like kind.”

In essence, should the bill come into law, it would prevent cryptocurrencies from double taxation under the Internal Revenue Code. 

Furthermore, last month, U.S. Congressman Tom Emmer relaunched his Safe Harbor for Taxpayers with Forked Assets bill. This promotes blockchain industry growth in the United States by reducing the burden on businesses to determine the relevant tax laws. 

Emmer stated: “Taxpayers can only comply with the law when the law is clear.”

The Safe Harbor bill is not proposing to eradicate taxes on a hard-forked blockchain, but attempts to offer a safe harbor to investors who do not accurately account for a hard fork when calculating their tax returns, says Coin Telegraph.

Mr Budd previously testified to the House of Representatives Ways and Means Committee in June on alleged issues with the current tax laws involving digital currencies. The Congressman said that cryptocurrencies should have a de minimis tax exemption akin to foreign currencies.