Biden eyes $5B in revenue from the new tax rules for cryptocurrencies and released the new budget proposal on Monday as we are reading more in our latest cryptocurrency news today.
President Biden’s 2023 budget proposal suggests applying a few accounting and tax reporting rules for digital assets and by doing so, Biden eyes $5B in revenue until 2023 and $11 billion in revenue in 10 years’ time.
US President Joe Biden submitted his budget proposal for the 2023 fiscal year in conjunction with the US Treasury Department’s revenue explanations and by the administration’s estimate, the US will gather up to $11 billion in revenue over 10 years and about $5 billion next year alone by simply applying certain financial accoutning and reporting practices for digital assets. The Biden Administration projects $6.6 billion in revenue between the 2023 and 2032 tax years from applying the new rules to crypto. The mark to market Is a way of appraising the value of assets which are taken into account as well as the market conditions that stay in contrast to using the purchase price of the asset that can be higher and lower with the fair market value. It’s a way of taxing unrealized gains which means that the taxpayer is on the hook once ETH goes from $3000 to $4000 even if she doesn’t sell.
The governemnt also aims to increase revenue by requiring US residents to report the holdings in offshore accounts above $50,000 and the US Treasury noted that they think they can collect $2.2 billion over the next decade by enhancing the reporting requirements:
“The global nature of the digital asset market offers opportunities for U.S. taxpayers to conceal assets and taxable income by using offshore digital asset exchanges and wallet providers.”
The administration wants the US Banks and financial institutions to share information with the IRS about the value of holdings from the foreign owners and the non-residents of certain business entities. This can impact citizens and residents as well who try to avoid US tax reporting by creating entities via which they can act. The Treasury wrote:
“To combat the potential for digital assets to be used for tax evasion, third party information reporting is critical to help identify taxpayers and bolster voluntary tax compliance.”
There’s another change the administration aims to make is regarding crypto loans will follow the same rules as other lending markets where the loan transfers of securities are not subject to gain or loss. The crypto lending products attracted customers by paying higher yields than the bank’s standard interest rates the practice has come under fire from the federal and state securities regulators. At this stage, the budget is only a proposal for changes that will go into effect, and over the coming six months, Congress and the administration will hash out the specifics.
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