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A bill that aims to amend the treatment of cryptocurrencies by the Internal Revenue Service has been referred to the U.S. House of Representatives Ways & Means Committee, CoinDesk reported.
On July 25, North Carolina’s Rep. Ted Budd (R) on July 25 reintroduced the bill, titled the “Virtual Value Tax Fix Act of 2019.” By amending1986’s Internal Revenue Code, the bill, if passed, would essentially end the double taxation on cryptocurrency transactions.
According to the Internal Revenue Code of 1986, no gain or loss is recognized on the exchange of real property for real property of like kind. The tax bill seeks to bring the same treatment to virtual currencies.
“[T]he exchange of virtual currency for virtual currency of like kind shall be treated in the same manner as the exchange of real property for real property of like kind,” the bill states.
In his previous comments, Rep. Budd had explained that due to the lack of like-kind exchange, the cryptocurrency industry is subject to double taxation of cryptocurrency transactions.
“An effective sales tax of nearly 40% penalizes the use of digital units of commerce,” he said. “The use of digital assets is already treated as a sale of the asset, even though the economic reality of the transaction is a purchase of a simple consumer good.”
Last month, Rep. Tom Emmer (MN-R) reintroduced the “Safe Harbor for Tax Payers with Forked Assets Act of 2019.” He said that the bill will bring more clarity on the tax treatment of cryptocurrencies following hard forks and airdrops.
