A tax bill aimed at refining the Internal Revenue Service’s treatment of cryptocurrencies has moved to the U.S. House of Representatives Ways & Means Committee.
The Virtual Value Tax Fix Act, first legislators first proposed last Congressional session, has been reintroduced by North Carolina’s Rep. Ted Budd (R) on July 25. In what Budd calls a national security issue, the bill would effectively end the double taxation on cryptocurrency transactions by amending 1986’s Internal Revenue Code.
Under the 1986 Code, gains and losses in transactions of real property of like-kind remain unrecognized. As Rep. Budd stated before an introduction of the bill in June, the code places a 40 percent tax rate on transactions. Budd says tax concerns and transaction record-keeping act as a deterrent to adoption.
“The use of digital assets is already treated as a sale of the asset, even though the economic reality of the transaction is a purchase of a simple consumer good,” Budd said.
If passed, the act would free cryptocurrency transactions from double taxation and record-keeping immediately.
Budd’s newest bill adds to other cryptocurrency legislation before Congress. In early July, Rep. Tom Emmer (MN-R) reintroduced the “Safe Harbor for Tax Payers with Forked Assets Act of 2019.” Emmer says the bill will bring clarity on taxable events following cryptocurrency forks and airdrops.
Rep. Budd’s legislation joins fellow North Carolina Representative Patrick Henry’s enthusiasm for cryptocurrency, particularly bitcoin. “I think there’s no capacity to kill Bitcoin,” Henry said speaking in preparation for Facebook’s Libra hearings prior to the U.S. House and Senate Committees,
“My point is: you can’t kill Bitcoin,” he said.
Image via budd.house.gov