Key Takeaways
Why will Congress discuss crypto tax next month?
To help address lack of clarity and the cost of the current crypto tax regime
Will it boost crypto adoption?
A clear and retail-friendly tax regime could drive crypto adoption. But there is a lot of balancing act for this to be achieved.
The U.S. Congress appears to be ready to take another shot at addressing the crypto tax, which many industry players have deemed restrictive.
On the 1st of October, the U.S. Senate Finance Committee will have a hearing on the same with the theme ‘Examining taxation in digital assets.’
Amongst those invited to the discussion are representatives from the crypto advocacy group, Coin Center, a Coinbase tax executive, and an official from the American Institute of CPAs.
This underscored Congress’s determination to address the current unclear crypto tax regime through a potential policy solution.
Sen. Lummis attempt to lower crypto taxes
In July, pro-crypto Senator Cynthia Lummis tried pushing for a tax exemption for transactions below $300 (also known as a de minimis exclusion).
Additionally, she voiced for lower rates for Bitcoin to encourage adoption.
Lummis also proposed deferral of tax on mining and staking income until the assets are sold, and an exemption on crypto lending. But the bill has not advanced from the introduction stage.
Although Lummis tried to slip in part of these proposals (like tax exemption for $200-$300 crypto transfers) into the ‘Big Beautiful Bill’, it was shot down due to revenue concerns.
Potential proposals at the hearing
As such, part of the proposals by Lummis could be floated again during the hearing. Besides tax clarity on staking, DeFi yield, derivatives, and lending could feature in the talks.
But like the past roadblock, lawmakers will have to balance the impact on government revenue and the adoption incentive.
Interestingly, the President Donald Trump administration supports a zero tax capital gain on Bitcoin [BTC] to make ‘crypto transactions easy.’
What’s next for U.S. crypto tax?
However, the upcoming hearing won’t immediately resolve the sector’s tax challenges. Instead, it aims to build consensus amongst tax experts.
Once that’s achieved, the Senate Committee will consider policy options, either amendments to existing laws or a standalone bill.
However, any legislative path chosen by the Senate must also be approved by the House.
Source: https://ambcrypto.com/u-s-senate-to-discuss-crypto-tax-reforms-on-october-1-details/
