In April, Coin Center explained how the tax laws affecting digital currency transactions create serious friction for consumers and merchants and discourages the use of Bitcoin (or any cryptocurrency) as an everyday payment method.
We also outlined how Congress could address this problem. Since then we have been working with congressional staff to develop legislation that would address the problem, and today I'm thrilled that with the leadership of Rep. Jared Polis and Rep. David Schweikert, co-chairs of the Blockchain Caucus, the Cryptocurrency Tax Fairness Act has been introduced in Congress.
The bill does two things.
First, it creates a de minimis exemption for cryptocurrency transactions for goods or services.
Today, if you buy a cup of coffee with bitcoins, you'll have to calculate and report any gains that you experienced and pay tax on any gains. Under the bill, any transaction under $600 would be completely exempt, so you'd neither have to worry about keeping track of gains on all the little purchases you make, nor would you owe taxes on those small gains.