The addition of new regulations to the White House’s tax infrastructure plan has prevented a “wash sale” loophole commonly exploited by crypto investors.
Once again, the regulatory problem in the US is giving the crypto industry a headache. On September 13, the US House of Representatives introduced suggest An ominous tax infrastructure law that could make billions of dollars but restrict investors.
As part of a $ 2 trillion increase in tax base, the proposed inclusion of goods, currencies and digital assets for “wash sale” is being proposed. If passed, it would raise nearly $ 16 billion over the next decade.
The new proposal closes a loophole that could help investors avoid capital gains tax when selling at a loss. For the plan to be successful, investors must wait 30 days before buying back shares or making an investment of equal value. Otherwise it would be considered a wash sale and not a capital gain deduction.
In addition, according to the U.S. Internal Revenue Service (IRS), cryptocurrencies are now in the asset category. Hence, it is not subject to such rules and digital asset investors can sell and buy cryptocurrencies and then claim a deduction. However, the new proposal has changed this.
Kristin Smith, executive director of the Blockchain Association, said:
“The new provision is fine as long as it only applies the existing rules to crypto assets and does not lead to other undesirable consequences.”
Regulations pile up
This is the latest news on crypto regulation from Washington for the past few months. This summer, the crypto industry was spooked by the original tax infrastructure law with the term “broker” – which put most industry insiders in the same reporting framework.
Many in the industry, including Coinbase CEO Brian Armstrong, have called the law detrimental to future innovation. Others outside of the room like Senator Pat Toomey are on the crypto side. Even so, the Senate passed the law. House spokeswoman Nancy Pelosi said she would vote for the law to be passed on Sept. 27.
Along with the regulations, cryptocurrencies have become the target of rigorous scrutiny by the US Securities and Exchange Commission. Two large crypto-focused companies, Coinbase and Uniswap, recently underwent SEC scrutiny.
We invite you to join our Telegram for faster news: https://t.me/coincunews
According to Beincrypto