2024-3-12 01:28 |
The Biden administration released its proposed budget for 2025 on March 11, which includes provisions to implement a series of regulatory measures targeting digital assets.
The proposed rules are expected to generate nearly $10 billion in additional tax revenue by 2025.
Closing loopholesThe new budget proposals specifically target a loophole that has previously allowed wealthy crypto investors to benefit disproportionately. By closing this gap, the administration seeks to create a more level playing field for all investors and increase tax fairness. The measure is part of a broader effort to adapt the nation’s tax code to the modern era of investment and technology.
Moreover, the proposals include a comprehensive approach to digital assets by applying wash sale rules to these assets, addressing related party transactions, and modernizing regulations to treat securities loans as tax-free to include other asset classes. These steps are designed to update the tax system to reflect the unique characteristics and challenges of digital asset transactions.
Furthermore, the budget emphasizes enhancing reporting requirements for financial institutions and digital asset brokers. This adjustment aims to ensure that transactions involving cryptocurrencies are monitored with the same diligence as traditional financial exchanges, thereby increasing transparency and reducing opportunities for tax evasion.
The government also plans to require certain taxpayers to report foreign digital asset accounts, extending the reach of US tax compliance efforts internationally.
Financial detailsAccording to the document, applying wash sale rules to digital assets is projected to raise over $1 billion in tax revenue in the fiscal year 2025 alone.
The budget also states that including digital assets in mark-to-market rules — which mandate the taxation of securities at their current market value rather than their purchase price — is expected to generate an additional $8 billion by the same year.
The proposal also introduces an excise tax on crypto mining operations, reflecting the sector’s rapid growth and relatively minor fiscal contributions, especially considering its environmental footprint.
The proposed excise tax on crypto mining endeavors is forecasted to decrease the national deficit by approximately $7 billion within the same timeframe. While similar tax provisions were proposed in last year’s budget, they faced legislative hurdles and were not enacted by Congress.
Aside from those crypto-related proposals, Biden’s budget broadly advances reduced costs for families, more robust Social Security and Medicare, and higher taxes on corporations and wealthy individuals.
According to CBS, the budget could trim deficits by $3 trillion over a decade while raising tax revenues by $4.9 trillion and allocating roughly $1.9 trillion to various programs.
The post Biden’s 2025 budget targets crypto tax loopholes, expands digital asset oversight appeared first on CryptoSlate.
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