![]() ![]() The IRS treats crypto as property, not as a security, which is how the asset class escapes these rules. House Democrats proposed legislation last Congress to close the tax loophole, by imposing the "wash sale" rules on commodities, currencies, and digital assets. ![]() The budget eliminates this and subjects crypto to the same so-called wash-sale rules that apply to stocks and bonds. Investors can sell crypto investments at a loss, take the tax-deductible loss to reduce their tax burden, and buy right back into the same investment. The new provision would raise $24 billion, according to the White House.Ĭurrently, crypto sales aren’t subject to the same rules that investors in stocks or bonds have to follow. Tucked within President Biden's budget is a proposal to change the tax treatment of cryptocurrency transactions that would eliminate investors' ability to take advantage of losses to lower their tax bills.
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