A Bill first proposed in September 2017 that would exempt cryptocurrency transactions of less than $600 was introduced as an amendment to the House Republican tax plan. This is the first update on the progress of the Cryptocurrency Tax Fairness Act since it was first introduced by Rep. Jared Polis and Rep. David Schweikert. Unfortunately, the amendment did not make it into the House tax plan. Hope remains high, though, as indicated in these remarks from Coin Center’s Jerry Brito:
“The bill’s language didn’t make it into the larger tax reform bill, but that doesn’t mean the bill itself is dead,” he added. “It’s alive and well and we will continue to advocate for its passage by Congress, and we’ll continue to work to try to have the IRS adopt as much of it as it might be able to through rulemaking. For an ecosystem that is barely a decade old to get this far in Congress is remarkable, and we’re only just starting.”
Coin Center has been researching and advocating for cryptocurrency tax reform. Rep. Polis refers to current IRS Tax policy in his comments. What isn’t clear at this point is whether Congress will consider reintroducing the bill with language revisions or allow it to quietly disappear this year. It is very apparent in the blockchain and cryptocurrency communities that reform is sorely needed, as the record keeping requirements are a nightmare for calculating taxes due when bitcoin and other digital coins are used for small purchases.
As it stands right now, you must keep a record of all transactions where goods or services are purchased. Required information includes estimated dollar value of the currency used at the time of purchase, the original cost basis of that portion of your coin holdings, and the net gain or loss. Each transaction must be reported on your IRS form 8949 for completion of Schedule D. You can read more about this in our Cryptocurrency Taxes article.
The 2018 tax plan crypto updates can be found here.
The Cryptocurrency Forums will continue to follow developments on tax reform. Consider registering for a free account to discuss taxes and to ask any questions you may have. Register here.