Home Crypto America’s Lawmakers Propose New Crypto Regulation Proposals

America’s Lawmakers Propose New Crypto Regulation Proposals

America’s Lawmakers Propose New Crypto Regulation Proposals

Democrats in the US House of Representatives have proposed a number of new tax initiatives that could potentially affect crypto users.

Closing the loophole

A first proposal is to increase the long-term weather values ​​from the current 20% to 25%. In addition, a surcharge of 3.8% on the net investment income is also discussed. Although this according to the official document mainly affects wealthy investors, the US capital gains and dividend tax rate could therefore reach 28.8%.

The tax plan also proposes adding digital assets to the ‘wash sale’ rules. These rules prohibit investors from claiming capital gains deductions on certain assets repurchased within 30 days of a sale, “previously applicable to stocks and other securities.”

Pre-existing tax laws under the IRS currently consider cryptocurrencies owned in “wash sales,” which some crypto users have been able to use to avoid capital gains, while US lawmakers’ proposal would close this loophole.

Vote on September 27

If approved and signed, the new plan would require crypto users to report taxes under the new wash-sale rules. These would then take effect on December 31, 2021, while the capital gains tax rate would apply to transactions made after September 13.

The House Democrats’ tax plan follows the passing of an infrastructure bill in the Senate that suggests implementing stricter rules for companies dealing with cryptocurrencies and expanding reporting requirements for brokers and exchanges. Many Democratic and Republican lawmakers have pushed for changes to the text in the bill, aiming to clarify the role of cryptocurrencies.

It is planned that a vote on this proposal will take place next September 27. As a result, it is currently unknown whether the proposal will actually be adopted.

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