About the New US Law That Exempts Bitcoin Transactions Under $600 from Taxes

Nakomoto News, a Russian company and partner of Law&Trust International in promoting informational content, received comments from our company's lawyer regarding the topic of the new U.S. law on bitcoins:

Will this bill allow cryptocurrencies to exit the black market?

In our opinion, this bill will not allow cryptocurrencies to leave the black market. The proposed legal exception, referred to as "de minimis," is primarily aimed at individuals using cryptocurrency for small everyday transactions.

Legal regulation in this area will certainly facilitate the use of cryptocurrency in the "real world."

At the same time, this is just one of the issues that needs to be resolved to bring cryptocurrency out of the black market.

Why is the threshold set at $600?

The $600 threshold seems to be driven by the initial goal embedded in the title of the bill.

The Cryptocurrency Tax Fairness Act aims to protect people who, when making a purchase for $5, are required to pay capital gains tax, since current legislation classifies these actions as capital appreciation.

Can we expect a future increase in the maximum amount for cryptocurrency transactions?

We believe there is no reason to expect an increase in the maximum amount for cryptocurrency transactions. At the same time, it is very important to understand the purpose behind the adoption of this bill.

Overall, the state is not interested in exempting cryptocurrency transactions from taxation. The IRS has repeatedly indicated this. The state is interested in safeguarding the rights of ordinary citizens.

In turn, the "de minimis" legal exception of $600 fully ensures citizens' right to use cryptocurrency in their daily lives without being taxed.

Why does the USA ask to declare cryptocurrency?

Declaring cryptocurrency is necessary because it is the only effective mechanism allowing the state to obtain information about someone having cryptocurrency.

Moreover, it is precisely based on the information contained in the declaration that taxes will be calculated in the future.

How, in your opinion, will the enforcement of this bill be monitored?

If the law is adopted, control over its implementation will be carried out in the same manner as control over cryptocurrency transactions is currently conducted.

Today, the IRS can obtain information about cryptocurrency-related transactions only from the person who performed them (by filing a tax return), parties involved in the transaction (for example, from a payment system that provides corresponding information in Form 1099, if it has the person's Social Security number), and simply interested but unrelated third parties (neighbors, colleagues, etc.) within the framework of general tax control.