Biden's $1.85T Spending Bill Would Make Avoiding Capital Gains Taxes on Crypto Harder

Crypto traders may be left without a loophole to bypass long-term capital gains. Read the full article by: Jeff Benson

Key Points:

• Since Biden has taken over as President there has been buzz around what that will mean as far as reporting taxable events on your crypto transactions.

• The Democratic party has always had the “tax the rich” approach so to speak. Previously this month we also heard Jannet Yellen talking about taxing unrealized capital gains for people that are making extreme amounts of money.

• That part gets lost by people that are just waiting to blast the president for this proposal but the people speaking out against will be ultimately unaffected if it were to even get passed.

• The new infrastructure bill, which has been cut in half price wise now down to $1.85 trillion, would look to keep people from wash trading as well as stoping a loophole in the options market. Biden believes this would help raise about $16 Billion in tax revenue over the next 10 years.

• For example if “you buy [Bitcoin] at $60k. It appreciates to $100k but it’s a short term capital gain. So you buy a put with a right to sell it for $100k thus locking in the gain. Without IRC Sec. 1259 applying, you can turn a short term cap gain into long term capital gain." This is one thing this bill would seek to combat.