Token Taxonomy Act seeks to make some amendments to the Securities Act of 1933 and the Securities Exchange Act of 1934. First introduced by Congressman Davidson and Representatives Darren Soto, Josh Gottheimer, Tedd Budd, Tulsi Gabbard, and Scott Perry in December 2018, the new bill seeks to clarify and streamline the conflicting crypto regulations of different states in the U.S. it was introduced at the conclusion of the 115th Congress as a means to “achieve a […] win for America’s economy and for American leadership in this innovative space.”
The bill was revised and updated and then became recently reintroduced in the Token Taxonomy Act (TTA). Jerry Brito, Coin Center Director revealed on May 13 at Consensus 2019 that the act includes a de minimis tax exemption for crypto transactions under $600. If a crypto owner makes a capital gain from $600 of crypto and above, then that owner is required to report the gain to the Internal Revenue Service (IRS), the United States’ tax authority by the stipulation of the de minimis tax exemption. A capital gain below said amount does not attract submitting one’s income from crypto to tax. Also noted is that this situation is in line with a de minimis proviso that was introduced in the 1990s Congress that determined how small gains on foreign currencies were treated. Prior to the de minimis proviso, any capital gains experienced over the course of holding foreign currency was bound to be reported in a case as simple as ‘purchased foreign currency to take a short vacation in another country.’
If the TTA bill is passed, it would officially exclude cryptocurrency from being classified as a security and remove the jurisdiction limit of the Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC); while serving as regulation certainty for the compliance and enforcement to crypto statutes. One wouldn’t be obligated to report capital gains in unnecessary instances as in the time past with the introduction of this bill.
Credits -Max Boddy, Aisshwarya TiwariJOIN OUR COMMUNITY