US President Joe Biden will propose changes to crypto taxation in an upcoming budget plan, according to a Wall Street Journal report on March 8th.
Biden’s budget plan will target sweeping trade
Biden’s budget plan could directly affect crypto investors.
The Wall Street Journal says the president will propose changing crypto taxation rules to target wash trading. While anti-wash trading rules apply to stock and bond trading, these rules do not currently apply to cryptocurrency trading.
This means investors can sell certain investments and take a tax-deductible loss before reinvesting – an illegal practice the government is no doubt keen to prevent.
The new crypto tax policy is projected to raise $24 billion. It would be part of Biden’s broader 2024 budget plan, which aims to reduce federal budget deficits by $3 trillion over a decade. The proposal may fail due to opposition from the Republican Party, which currently holds a majority in the House of Representatives despite Biden’s Democratic leadership and a Democratic Senate.
Biden is expected to release the new budget plan on Thursday, March 9.
Other crypto tax changes
While Biden’s changes are not guaranteed to take effect, various other recent tax policy changes will affect US crypto investors this tax season.
The IRS expanded the scope of crypto tax rules in February. These changes mean that anyone who has dealt with digital assets must now report their activities.
Other reports point to this non-fungible tokens (NFTs) may be taxable. In addition, some cryptocurrency exchanges have started to provide 1099-B forms to its users in 2022, giving crypto investors more information to report to the IRS.
Recent third party surveys by CoinLedger suggest that many crypto investors have not included crypto transactions in their tax returns when required. Only 58% of respondents confirmed that they included cryptocurrency in their tax returns in 2022.
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