A tax bill introduced to refine the Internal Revenue Sevice’s treatment of Cryptocurrencies has just been inaugurated in the United States House of Representatives.
Amending the Internal Revenue Code 1986
Initially labelled by Rep, Ted Budd (NC-R) on July 25, “The Virtual Value tax Fix Act of 2019” and referred to the Committee On Ways and Means , this bill seeks to make amendments to the Internal Revenue Code of 1986 which would efficaciously bring to an end the double taxation on Cryptocurrency tranasctions and specifically determine that:
“No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like-kind which is to be held either for productive use in a trade or business or for investment.”
This bill is introduced so that “ the exchange of virtual currency for virtual currency of like-kind would be handled in the same manner as the exchange of real property for real property of like-kind” thus impeding the double taxation of cryptocurrencies if the bill became law under the Internal Revenue Code.
In early July, U.S Congressman Tom Emmer reintroduced the “Safe Harbor for Taxpayers with Forked Assets Act of 2019”, saying the bill would bring clarity on taxable events including cryptocurrency forks and airdrops, lessen the burden on businesses by figuring out relevant tax laws in order to support the growth of the blockchain industry.
The Safe Harbor bill will not eliminate taxes on a hard-forked blockchain but rather would focus on providing a safe harbor to investors who cannot properly account for their tax returns for a hard fork.
In June, Budd testified to the House of Representatives Ways and Means Committee on purported issues with the current tax laws on cryptocurrencies and asserted that cryptocurrencies should have a de minimis tax exemption like other foreign currencies.