U.S. Senator Cynthia Lummis has introduced a bill aimed at modernizing the tax code for digital assets, following the passage of a federal spending bill with no mention of cryptocurrency.
Key Provisions of the Bill
Lummis' proposal includes a de minimis exemption for crypto transactions and capital gains up to $300, with an annual cap of $5,000. It would also defer taxes on mining and staking rewards until the assets are sold, and exempt crypto lending agreements and charitable contributions made in digital assets from taxation.
Response to Tax Measures
Lummis remarked that "this groundbreaking legislation is fully paid for, cuts through bureaucratic red tape, and establishes common-sense rules that reflect how digital technologies function in the real world". Industry voices have long expressed frustration over the lack of clear and fair tax treatment for cryptocurrencies in the U.S.
Future Prospects
Lummis' bill comes amid mounting pressure on lawmakers to address crypto taxation issues. While the spending bill passed without including crypto language, Lummis views her standalone bill as the clearest path forward, potentially paving the way for further reforms in the taxation of digital assets.
Senator Lummis' bill raises important questions about modern taxation of digital assets and could serve as a foundation for future changes. Increased attention to taxation in this area may lead to an improved legal environment for cryptocurrency users.
