In the halls of the US Congress, Senators handily passed an infrastructure package 69-30. But how will the US Government pay for that package?
One way the government could raise $28B over ten years is by taxing Bitcoin. Does this spell the end of the ever-growing intangible?
Although greatly unregulated, the bitcoin market is thought to amount to $1.8 trillion, including all forms of cryptocurrency. These currencies are gaining legitimacy as big-name businesses continue to accept the blockchains as forms of payment.
On August 9, 2021, the Treasure Department voted down a compromise amendment regarding the reporting of cryptocurrency transaction. The idea was to excluding blockchain owners, developers, validators, operators, and “other non-brokers” from the reporting requirements, making broker’s responsible for reporting transaction details. The failure of this amendment complicates the US government’s ability to monitor and collect taxes on cryptocurrency.
This government setback is just one in a long road of attempts to invalidate, and now monitor, and perhaps one day control the crypto-market. At this point, few brokers report personally identifying information to the IRS despite the requirement that cryptocurrency exchangers submit annual reports.
At this time, the IRS views and therefore taxes cryptocurrency as physical property like bullion. They charge a capital gains tax when the “property” is bought or sold.
Stay tuned to Pendant and Ring for collectible coin, bullion, and cryptocurrency updates.