U.S. Senator Cynthia Lummis introduces a comprehensive digital asset tax bill aimed at facilitating the development of the cryptocurrency market and ensuring tax fairness.

This bill proposes a tax exemption for small transactions, adjusts regulations for digital asset lending, corrects tax loopholes, and defers income recognition from mining and staking, while also supporting charitable digital asset donations.

MAIN CONTENT

  • Set a minimum transaction threshold of $300, with a maximum total of $5,000 per year.

  • Expand regulations for digital asset lending, helping to develop a healthy market.

  • The proposed bill is expected to contribute nearly $600 million to the budget from 2025-2034.

What does Senator Cynthia Lummis's digital asset tax bill address?

The bill proposed by Cynthia Lummis adjusts tax regulations to align with the realities of transactions and the development of the cryptocurrency market, ensuring fairness and efficiency. According to the report from the Joint Committee on Taxation of the U.S. Congress, the bill is expected to increase budget revenue by nearly $600 million over the next 10 years.

Ms. Lummis, a frontrunner in advocating for a legal framework for cryptocurrency in the U.S. since 2022, stated: 'We need a clear, reasonable tax system to encourage innovation while protecting users.' (Excerpt from the FinTech Conference in June 2024)

What does the bill specify about small transaction thresholds and user impact?

The bill sets a tax exemption threshold for small transactions starting at $300, totaling no more than $5,000 each year. This amount will be adjusted for inflation starting in 2026, helping to reduce the tax reporting burden for small investors.

This supports users in avoiding unnecessary taxes when making small transactions, contributing to enhancing the feasibility and convenience of cryptocurrency in life.

How does the bill handle digital asset lending?

The expansion of regulations on digital asset lending in the bill is similar to securities lending laws, preventing temporary lending from causing immediate tax liabilities. This is an important step toward sustainably developing the digital lending market, minimizing legal barriers.

The exclusion of tax for temporary lending activities helps the cryptocurrency market gain additional motivation to develop diverse financial services.” – John Reynolds, Blockchain Tax Expert, 2024

John Reynolds, Blockchain Tax Expert, 2024

What tax loopholes does the bill address?

The bill updates provisions to eliminate the possibility of reporting fictitious losses through wash trading, while ensuring that digital asset taxes and traditional securities are applied fairly. Additionally, the bill allows agents to apply market prices to value assets, reducing discrimination between asset types.

What does the bill specify about income from mining and staking?

Mining and staking activities will have income recognition deferred until the assets are sold or exchanged, helping to reduce the financial pressure on taxpayers due to not having to pay taxes immediately upon income realization without actual cash flow.

What impact does the bill have on digital asset donation activities?

The bill exempts the value of digital assets being actively traded in the process of assessing charitable asset transfers, minimizing difficulties in donations and encouraging the use of digital assets for social purposes.

How might the U.S. cryptocurrency tax bill affect the market?

Improving the tax framework helps enhance transparency and protect investors while boosting the credibility of the cryptocurrency industry. According to the Joint Committee on Taxation of the U.S. Congress, the bill is expected to support budget revenue of approximately $600 million during the period 2025-2034, demonstrating the balance between development and management.

Can we compare the key points in the new tax bill with existing policies?

Criteria New Bill Current Policy Tax-Free Transaction Threshold $300 (total $5,000/year) Not clearly defined, all transactions must be declared Tax on digital asset lending Tax deferral, apply securities lending law No regulation, creating barriers for the market Recognize income from mining, staking Deferred until sold/converted interaction Deduct immediately upon income Donation of assets Exempt from assessing digital assets used for transactions No specific incentives

Frequently Asked Questions

  • Does the bill apply to all individuals using cryptocurrency?
    Applies to all individuals and organizations conducting digital asset transactions in the U.S., as assessed by the Joint Committee on Taxation.

  • What is the $300 threshold in this bill?
    This is the minimum threshold for tax exemption for each small transaction, helping to reduce the procedures and costs of tax reporting for small investors.

  • Why does the bill defer the recognition of income from mining and staking?
    Helps reduce tax pressure when there is no actual cash income, improving the cash flow of the taxpayer.

  • How does the bill affect digital asset lenders?
    Protects lending activities from immediate tax liabilities, facilitating the development of the digital financial market.

  • How much does the bill contribute to the budget?
    Expected to raise about $600 million over 10 years, according to the report from the Joint Committee on Taxation.

Source: https://tintucbitcoin.com/lummis-de-xuat-luat-thue-crypto-my/

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