A House panel with jurisdiction over tax policy is readying legislation to address the taxation of cryptocurrencies for release as early as Friday, before a hearing early next week.
House Ways and Means Chairman Jason Smith has made establishing a framework for the taxation of digital assets a top priority for the committee, even as the Senate toils to pass market structure legislation.
While individual members have put forward measures that would address the taxation of digital assets, the bills being presented represent the first effort backed by leadership of either the House or Senate tax-writing committees. The Treasury Department has also been involved in the process.
The industry has pushed for legislation that would create parity between the tax treatment of digital assets and traditional financial instruments, as well as clearer guidelines for situations that don’t have clear corollaries in traditional finance.
The committee is expected to release seven bills addressing those issues, including when a digital token created through mining or rewards collected from staking – or temporarily locking a token on a blockchain network to aid in its operation – should be taxed, according to two people familiar with the matter.
Earlier: House Plan Sets Tax Harbor for Stablecoins, Crypto Staking
Representative Kevin Hern, an Oklahoma Republican and member of the committee, said addressing the tax treatment and timing of taxation of staking and mining were among the issues the panel intended to address, along with the exemption of some stablecoin transactions from capital gains tax. Hern said he expected legislative text to be prepared before a hearing scheduled for Tuesday.
The measures would also bring parity to the tax treatment of digital assets and securities, including for charitable donations, and safe harbors that allow foreign investors to trade US securities without being taxed as a domestic business, and that enable the temporary transfer of an asset without triggering capital gains tax.
The legislation would also extend to digital assets wash sale restrictions that bar investors from claiming losses on the sale of a security, if they buy a substantially similar asset back within 30 days, for tax purposes.
A spokesperson for the Ways and Means panel did not immediately respond to a request for comment on Thursday evening.
Committee Republicans have met for months to craft the measures, and more recently have brought Democrats in on the process through a closed-door round table last month featuring the testimony of representatives from the cryptocurrency and financial services industry, as well as academics.
Smith, a Missouri Republican, has insisted that any digital asset legislation the committee takes up be bipartisan. It was not immediately clear that the bills slated for release had backing of committee Democrats yet.
“The risk of doing legislation and the risk of not doing legislation, those are some of the things that have to be considered,” Representative Mike Thompson of California, the top Democrat on the Tax Subcommittee, said after last month’s roundtable.
Kenneth Kies, the top tax official at the Treasury Department, said last month that the department had worked with Ways and Means on the measures, as had the Commerce Department and the White House.
As for the Senate, top Republican and Democratic tax writers there are working on their own legislation to address the taxation of digital assets.
With assistance from John Harney.
This article was generated from an automated news agency feed without modifications to text.
