In July, legislators with the United States Finance Services Committee announced they would receive recommendations concerning taxing crypto up to September 8.
The Blockchain Association, a U.S-founded cryptocurrency advocacy group, has provided recommendations for policymakers to consider in prospective regulation concerning the tax treatment of digital assets.
In the September 8 letter to United States Senators Mike Crapo and Ron Wyden, the group claimed that lawmakers must back the Keep Innovation in America Act. This bill seeks to alter the reporting requirements for specific taxpayers involved in the transaction of crypto.
The Blockchain Association asserts that any law introduced in Congress must ‘establish equilibrium’ between crypto and non-crypto assets taxation. Additionally, it should shed light on the requirements for data regarding income earned from mining and staking crypto.
Prioritize Attention to Crypto Tax Legislation
Some recommendations were the same as those that Coin Center, a crypto advocacy group, suggested in August. This includes creating the minimum threshold meant to leave out losses or gains of specific crypto transactions from the requirements of tax reporting. The Blockchain Association penned the letter on the last possible day the United States Financial Services Committee claimed it would be gathering replies after a request in July.
The September 8 letter revealed that the Committee must direct more attention to the development of measured and intentional legislation regarding particular taxation matters as they relate to digital assets.
The Blockchain Association pleaded with the Committee to be careful not to ratify a law that offers less favorable tax treatment for digital assets in comparison to the rest of the assets. Instead, it should focus on the development of legislation meant to even the playing field for digital assets in contrast to other assets.
Examples of additional recommendations for the two senators to consider entailed rejecting a digital asset mining tax suggested by the Biden administration. The association asserted that this measure might affect the crypto industry’s ‘growth and development.’
IRS Directs Disclosure of Staking Rewards in Tax Filing
Initially publicized in March as part of United States President Joe Biden’s fiscal year 2024 budget, this proposal would entail an excise tax of 30% on power utilized by crypto miners.
The recommendation for crypto tax guidance by United States legislators came after an announcement on July 31 from the Internal Revenue Service (IRS) claiming that filers should disclose staking rewards as gross income in the year received. This created new standards for United States taxpayers in 2024.
In addition, the purchase, sale, and exchange of crypto assets are taxed by the IRS as capital losses and gains. Mining rewards are also affected by these requirements.
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