POTUS Biden has recently presented a proposal to talk about introducing some changes in the taxation structure of cryptocurrency investors. These changes are going to be reflected in the upcoming national budget plan, according to a new article published by Wall Street Journal. The bipartisan bill introduced by Biden Administration is set to go into effect in 2024.
The WSJ article has claimed that the Biden administration is looking to target wash trading in its next undertaking. At present, wash trading rules are limited to stocks and bond trading, but these rules do not apply to cryptocurrency traders thus far.
With wash trading precautions in place, investors who are making sizable sales will be under obligation to accept tax-deductible loss before investing in the same position again. This small change in the crypto taxation policy will allow the government to raise $24 billion in tax in the collection from the crypto sector.
Biden’s 2024 Budget Plan
This change is going to be part of the Biden budget plan for 2024. Another major aim for next year’s budget is that the government has plans to cut down $3 trillion in deficits.
However, the Democratic government may face issues from the opposition in reaching a consensus to pass the bill. It is worth noting that despite Biden getting elected Republican Party makes the majority of House seats.
Biden administration’s plans to make changes in the crypto trading sector do not seem to be limited to taxation policies only. IRS has also expanded the span of crypto taxation during the last month. The introduction of these changes has now obligated cryptocurrency investors to comply with more stringent crypto trading reporting than before.
Another report suggests that NFTs can be taxed shortly. Furthermore, cryptocurrency exchanges might need to use 1099-B forms to report their user activities and details taking place in 2022.
A recent report by CoinLedger has suggested that about 58% of cryptocurrency investors reported being compliant with their crypto taxation obligations last year.
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