United States House of Representatives has introduced a tax bill seeking to allow the exclusion of gain or loss on like-kind exchanges of virtual currency.
Rep. Ted Budd (NC-R) introduced a bill which is called the “Virtual Value Tax Fix Act of 2019” on July 25 and referred to the Committee on Ways and Means.
This new bill is an amended version of the Internal Revenue Code of 1986. The original bill specifically determines:
“No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like-kind which is to be held either for productive use in a trade or business or for investment.”
The bill is seeking so that “the exchange of virtual currency for the virtual currency of like-kind shall be treated in the same manner as the exchange of real property for real property of like kind.”
If the new bill gets passed into law, it will prevent cryptos from getting double taxation under the Internal Revenue Code.
The Safe Harbor was reintroduced last month by, U.S. Congressman Tom for Taxpayers with Forked Assets bill in order to foster blockchain industry growth in the U.S. by reducing the burden on businesses to figure out relevant tax laws. According to the congressman, “taxpayers can only comply with the law when the law is clear.”
The aim of the Safe Harbor bill is not to cut taxes off a hard-forked blockchain, but to provide investors who do not properly account for a hard fork in calculating their tax returns a safe harbor.
In April 2019, two Congress representatives Warren Davidson and Darren Soto — a co-sponsor of the foregoing licensing and registration bill — moved to reintroduce the Token Taxonomy Act. Reportedly, this bill would exclude cryptocurrencies from security regulation.
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