Will it be a more favorable year for Trump?
This could be teasing as Donald Trump, the current President of America, proposed a tax slash to cryptocurrency users.
In a news conference at the White House, President Trump disclosed that his administration is “very seriously” after a capital gains tax cut for the new digital currency.
“We’re looking at also considering a capital gains tax cut, which would create a lot more jobs”, as reported.
However, there were doubts about how the President is going to implement this and to what extent.
By fact, the long term capital gains rate of 20% is primarily governed by Congress, thus, delivering a big cut he’d need to get lawmakers on the side via negotiation.
Alternatively, an executive order could be a tool to reduce tax bills in a move known as indexing capital gains to inflation.
As a result, the original purchase price of an asset is adjusted when it is sold so that no tax is paid on appreciation tied to inflation from Bloomberg reports.
The effect of this is that this would be of much less benefit to traders, as crypto profits can make CPI look valuable.
Talking about taxation, the topic in the U.S. is a minefield.
Americans are taken to report gains and losses on each cryptocurrency transaction or if they are profitable in cryptocurrency thru staking, whether or not they have made a revenue yearly.
One of the agencies in charge of making this happen is the Internal Revenue Service, or IRS, which identifies cryptocurrency as property, not currency.
The Failure to report income from the sale of digital assets could result in penalties and interest on unpaid taxes.
Moreover, the IRS also states that wages paid to employees using cryptocurrencies are subject to federal income tax withholding and payroll taxes.
Earlier, the IRS is getting a tight and strict ruling at tracking crypto taxes. As staking rewards remained bullish, tax authorities in the U.S. are keeping up with the game.
Also, the parked introduction of staking on Ethereum 2 will be a source of capital gains nightmare for stakers as recipients need to account for the amount, and current price, of rewards each time they are distributed.
Once succeeded, Trump could at least offer the opportunity to keep at least a little more of the gains after all the recording keeping and paperwork has been done.