The uproar around President Joe Biden’s flagship economic plan is a temporary victory for crypto investors who were faced with the possibility of higher taxes on capital gains if it were enacted.
Amid the version of the plan that the House of Representatives approved in November were two measures that would limit the tools such investors can currently use to reduce their taxes, restrictions that already apply to stocks and other securities.
The provisions were kept in an unfinished version that was part of the Senate Finance Committee plan released earlier this month.
Biden’s $ 1.75 trillion tax and spending plan suffered a severe blow Sunday when moderate Democratic Senator Joe Manchin announced his opposition after months of negotiations between lawmakers and the White House.
There is still a chance that Democrats will come up with a scaled-down version of the plan next year, but it’s unclear whether crypto measures fit into it.
“Bill’s deadlock is a win for crypto investors“Said Lisa Zarlenga, a partner at the law firm Steptoe & Johnson LLP, which advises clients on tax issues related to cryptocurrencies.
“But as you know, once the legislative language is there, it never really goes away.”He said, suggesting that the proposals could resurface later.
One of the proposed changes would impose taxes on capital gains when investors take short and long offsetting positions in a digital asset and the other would prohibit investors from claiming a tax deduction if they sell their cryptocurrencies at a loss and buy an asset. “substantially identical”Before 30 days after the sale.
It is estimated that subjecting digital assets to these rules of “constructive sale” Y “washing sale”Would generate around US $ 16.8 billion over 10 years to help pay for new social spending initiatives.
