Will Congress Really Make Crypto Tax-Free?
Cryptocurrencies have attracted a wide audience of investors, but many remain on the sidelines because of the uncertainties surrounding digital asset markets. One big source of consternation for many would-be crypto investors is the way crypto transactions get taxed, especially given the large long-term gains in the value of Bitcoin (CRYPTO: BTC) and other digital assets.
However, a new bill set to be introduced in Congress could make dramatic changes to the regulatory framework for cryptocurrencies. The bill, dubbed the Responsible Financial Innovation Act (RFIA), is comprehensive, covering a wide range of provisions such as which digital assets could be exempt from regulation as securities, how regulatory authority could get split between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, and the oversight and banking treatment of stablecoins. However, the provisions governing taxation of digital assets could be game changing for users of cryptocurrencies, potentially making many transactions tax-free.
The problem with crypto and taxes is that although many people who use it for regular transactions think of it as a digital substitute for money, when you use money to buy something at the store, you don't have to report anything on your tax return. Crypto investors argue the same thing should be true when you use cryptocurrency to buy something.
Source Fool.com