Four senators are fighting to exempt low-value crypto transactions from federal taxation. Congressional approval for their proposal is long overdue.
Bitcoin (BTC) policy has been the talk of the town in Washington, D.C. ever since former President Donald Trump, Republican Senator Cynthia Lummis (WY), and presidential candidate Robert F. Kennedy Jr. all announced their support for a strategic Bitcoin reserve at the Bitcoin 2024 conference in Nashville. Yet, the renewed introduction of another proposal in Congress flew under the radar, and it’s long overdue: creating a tax exemption for taxpayers who pay with cryptocurrency.
Cryptocurrency has become many things to many people. But one of the original purposes was to create a new kind of money. Yet, capital gains taxes act as a major obstacle to achieving this end. Just consider how complicated the tax makes something as simple as buying a cup of coffee with Bitcoin.
First, a sales tax is usually a flat percentage added on to the bill by the merchant, but figuring out what you owe for the capital gains tax falls on you. It requires you to report the sale price, cost, timeline, and gain or loss associated with each transaction. All of this information must be recorded on Schedule D of Form 1040 to find the tax owed.
