Proposed changes on tax rules aroun cryptoasset wash trading could raise up to $24 billion, according to the Biden administration
President Joe Biden’s 2024 Fiscal Year budget will propose tax changes on cryptoasset transactions to eliminate wash trading.
As cryptoassets are not classified as securities, existing cryptocurrency traders are able to claim tax-deductible losses on failed cryptoasset losses and allow them to buy back into the same investments.
Congress has previously considered changing the status of cryptoassets, but any bill is far from passage in the divided legislature.
This latest change in tax requirements for cryptocurrencies is expected to raise $24 billion for the Treasury, according to the Wall Street Journal.
In addition to applying the same rules to crypto traders as investors in the stock market — the Biden administration is also planning to increase tax rates for America’s wealthiest 0.01% to a minimum of 25%.
Individuals making more than $400,000 a year would see an increase in their taxes from 37% to 39.6% and corporations would see their taxes go up from 21% to 28%.
Currently, cryptocurrencies are considered a digital asset and according to the Internal Revenue Service (IRS) are taxable if they generate a gain or loss, including but not limited to:
- Sales for fiat currency
- Exchange for goods and services
- Minting and staking activities
The budget is expected to be released today, but will need to be approved by the House of Representatives and the Senate before receiving final sign-off from the President.