U.S. President Joe Biden will propose tax changes for cryptocurrencies in his upcoming budget plan, the Wall Street Journal reported on March 8.
Biden’s budget plan will target wash trading
Biden’s budget plans could directly affect cryptocurrency investors.
The president will propose changes to the rules taxing cryptocurrencies to target wash trading. While anti-wash trading rules apply to trading stocks and bonds, they currently do not apply to cryptocurrency trading.
This means investors can sell certain investments and take tax-free losses before reinvesting them – an illegal practice that the government certainly wants to prevent.
The new crypto tax policy is expected to raise $24 billion. It would be part of Biden’s broader 2024 budget plan, which aims to cut the federal budget deficit by $3 trillion over a decade. The proposal is likely to fail due to opposition from Republicans, who currently hold a majority in the House despite Biden’s Democrats and Democratic Senate leadership.
Biden is expected to announce a new budget plan on Thursday, March 9.
Other Changes to Crypto Tax
While there’s no guarantee that Biden’s changes will take effect, many other recent tax policy changes will affect cryptocurrency investors in the U.S. this tax season.
The IRS expanded the scope of its crypto tax rules in February, and anyone who has come into contact with digital assets must report their activities.
Other reports suggest NFTs could be taxed. Additionally, some cryptocurrency exchanges have begun providing their users with 1099-B forms in 2022 for reporting to the IRS.
A recent third-party survey by CoinLedger revealed that many investors failed to include crypto transactions in their tax reports when necessary. Only 58% of respondents confirmed having included cryptocurrencies in their tax reports by 2022.
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According to Cryptoslate