President Biden is determined to close down crypto tax loopholes with his new Buil Back Better act. The act is set to have several provisions for cryptocurrency taxation. Cryptocurrency transactions will officially be under constructive sale rule under the Rules Committee print of the bill. The hopes behind the bill are that it would tax crypto under capital gains and prevent tax loopholes using derivatives or short sales. For the first time, the bill has a fixed definition for digital assets. The draft also mentions additional funding for the United States SEC to monitor crypto-related activities.
The Build Back Better act is Biden’s master plan for economic reforms in the United States. With the present rate of growth in crypto, it is impossible to ignore it while setting up economic policies. It is also the first time that a President of the United States has shown clear indications of bringing crypto under regulation.
Previously, the House Ways and Means Committee also came up with a similar bill. The two bills will affect the working and implementation of each other. Many prominent senators have decided not to vote for the House Ways and Means Committee unless the Build Back Better act is also passed.
These developments again hint at a growing demand for regulation in crypto. Recognizing the sector’s potential, governments are now trying to get their share of revenue from it. If both acts come into play, it will cause several changes in the country’s crypto sector.