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Bipartisan Bill Promises to Facilitate Cryptocurrency Exchanges

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The cryptocurrency world has reason to smile at Congress, as a bipartisan bill focused on facilitating such transactions was introduced. Senators Pat Toomey (R-PA) and Kyrsten Sinema (D-AZ) introduced the Virtual Currency Tax Fairness Act.

The bill aims to simplify the use of digital assets for everyday purchases. Specifically, it exempts small personal transactions using virtual currencies for goods and services from taxation.

The senator from Pennsylvania highlighted the bill via Twitter, saying that “while crypto has the potential to become part of our everyday lives, the current tax code stands in the way.”

“The Virtual Currency Tax Fairness Act will allow Americans to more easily use cryptocurrencies as an everyday method of payment by exempting small personal transactions, like buying a cup of coffee, from taxation,” said Toomey who will leave office in early 2023.

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Sinema said that with this bill, “We’re protecting Arizonans from surprise taxes on everyday digital payments, so as use of digital currencies increases, Arizonans can keep more of their own money in their pockets and continue to thrive.”

The legislation also boasts bipartisan support in the House of Representatives, where Reps. Suzan DelBene (D-WA) and David Schweikert (R-AZ) await it with open arms. It should be recalled that both introduced the previous version of this bill in February.

The bill that may make it easier to move around with cryptocurrencies

According to the current legislation, every time a digital asset is used, a taxable event occurs, i.e. it marks the beginning of a tax liability. If a person wants to pay for a kilo of carrots with cryptocurrencies, he or she will have to pay capital gains on the transaction if the value of the digital asset increases, even by a penny. This tax can range from nothing itself to 20%, depending on different variables.

The Virtual Currency Tax Fairness Act would come to simplify this process. It will create exemptions for gains of less than $50 in personal transactions and for personal transactions of less than $50.

As to the fate of the bill, it is expected to be dealt with after the Congressional holiday in August.

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