Cryptos and taxes have been in the news cycle quite a bit in recent weeks. At least here in the US.
As a refresher, the [IRS] https://www.irs.gov/newsroom/irs-virtual-currency-guidance) treats cryptos, which it calls virtual currencies, as property. Which means the general rules for property transactions apply.
That was almost a good thing until the recent tax bill amended like-kind exchanges to “real” property. Meaning, going from BTC to ETH or any other crypto is a taxable event. Onerous.
But we are seeing some states take actions on their own. Let’s see what’s going on.
On February 8 Arizona passed Senate Bill 1091 which lets residents pay their taxes in bitcoin and other approved cryptocurrencies. The bill is now with the House of Representatives.
If passed we could see more states follow suit and other legislators warm up to cryptocurrencies.
There also another piece of legislation in motion in Arizona, House Bill 2602. This one would protect cryptocurrency node operators.
More recently Wyoming’s Senate passed Senate File Number 0111 which would exempt virtual currencies from property taxation. Like Arizona, it now has to go before the House.
Wyoming also has HB0019 which exempts virtual currency from the Wyoming Money Transmitter Act. And HB0070 which removes cryptocurrency utility tokens from under the umbrella of security tokens. Both unanimously passed the House and are being introduced in the Senate.
Colorado has Senate Bill 86 which proposes using the blockchain to governmental data security.
And now a bill has been proposed in Georgia to consider bitcoin for use in tax payments as well.
What we really need is for the Crptocurrency Fairness Act to get passed, which would exempt bitcoin transactions from IRS reporting if they are below $600.
Best I can tell it was introduced to the House back on September 7, but it didn’t make it into the tax bill in November. Hopefully it can be introduced again.
What do you think, will we ever get some sensible crypto tax legislation?
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