The Biden administration reportedly wants to apply the wash sale rule to crypto, which would end a strategy in which a trader sells and then immediately buys digital assets for tax purposes.
US President Joe Biden’s upcoming budget plan holds a few surprises for crypto traders and investors, including plans to double capital gains for some investors and crypto market volatility.
The Biden administration is expected to release its 2024 budget plan on March 9, which will aim to reduce the deficit by nearly $3 billion over the next decade. It includes changes in the tax treatment of crypto with the aim of raising around $24 billion, according to reports.
One such strategy involves stopping the process of a crypto trader selling assets at a loss for taxes, known as tax-savings, before buying them later, like Wall Street. log. Such plans are not allowed when stocks and bonds are involved under the current sales rules. However, crypto is not currently under the same rules, because digital assets are not classified as securities. Now it looks like the US government is looking to change that.
Speaking to Cointelegraph, Danny Talwar of crypto tax software company Koinly said:
“This is inevitable for the United States, which, if implemented, will be seen in other jurisdictions such as Canada and Australia, where crypto car washes are applied.”
“If the law is implemented, the timing is important as many crypto holders who entered the crypto space following the 2021 market price are facing huge losses,” he added. Biden’s budget also expects to nearly double the income tax rate for investors earning at least $1 million to pay 39.6% on long-term investments, from the current tax rate a by 20%. He plans to raise income and business taxes on wealthy Americans, according to Bloomberg.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up