- Tax exemptions of up to $600 can be availed of on all crypto-related profits and transactions if the TTA comes into effect.
- Additionally, the act will also save altcoin owners the hassle of having to report any crypto tx’s up to the above-mentioned sum when filing their tax returns.
Some of our readers may be aware of the fact that the recently reintroduced Token Taxonomy Act (TTA) will create a “de minimis tax exemption” for crypto tx’s valued at $600 and under.
From a technical standpoint, we can see that the new exemption rule will allow crypto holders to not pay any taxes on their altcoin profits (up to $600). Not only that, these transactions don't even have to be reported by an individual/business to the United States Internal Revenue Service (IRS) when filing their annual returns.
A Deeper Look At The Matter
The US government’s aforementioned step is being viewed by many experts as having parallels to how small gains on foreign currencies were treated up until the introduction of the ‘de minimis provision’ (which came into effect in the early part of the 1990s). Prior to this period, people incurring any capital gains on their purchased foreign currency would have reported them to the local authorities before leaving the nation’s borders.
Lastly, it should also be added that due to the uncertainty of definition surrounding various crypto assets, altcoin holders may technically be required to report any capital gains when purchasing regular items (such as tickets, electronic goods) using digital currencies.
In closing out this piece, it should be mentioned that the TTA — if passed — will allow cryptocurrencies to be excluded from being classified as a ‘securities’. Not only that, but the act also seeks to heavily
“contain the powers of the CFTC (Commodity Futures Trading Commission) and the Federal Trade Commission (FTC) in relation to digital assets”.