Biden Proposes to Change Crypto Tax Rules: WSJ
US President Joe Biden will propose changes to crypto taxation in an upcoming budget plan, according to a March 8 Wall Street Journal report.
Biden’s budget plan will be aimed at laundering
Biden’s budget plan could directly affect crypto investors.
The Wall Street Journal says the president will propose a change in crypto taxation rules to target money laundering. Although anti-wash trading rules apply to stock and bond trading, these rules do not apply to cryptocurrency trading.
This means that investors can sell certain investments and accept a tax-deductible loss before reinvesting – an illegal practice that the authorities will no doubt want to prevent.
The new crypto tax policy is estimated to raise $24 billion. It will be part of Biden’s broader 2024 budget plan, which aims to cut federal budget deficits by $3 trillion over a decade. The proposal may not succeed because of opposition from the Republican Party, which currently holds a majority in the House despite Biden’s Democratic leadership and a Democratic Senate.
Biden is expected to release the new budget plan on Thursday, March 9.
Other changes to crypto taxes
While Biden’s changes are not guaranteed to take effect, various other recent tax policy changes will affect crypto investors in the US this tax season.
The IRS expanded the scope of crypto tax rules in February. These changes mean that anyone who has dealt with digital assets must now report their activities.
Other reports suggest that non-fungible tokens (NFTs) may be taxable. In addition, some cryptocurrency exchanges began providing 1099-B forms to their users in 2022, giving crypto investors more information to report to the IRS.
Recent third-party research by CoinLedger suggests that many crypto investors have not included crypto transactions on their tax reports when required. Only 58% of respondents confirmed including cryptocurrency on their 2022 tax returns.
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