Steve Stockman Shops Bitcoin Tax Bill
Posted at 3:27 p.m. on June 13, 2014
Texas Republican Steve Stockman is shopping around his bill that would require the IRS to treat virtual currencies like Bitcoin as foreign currencies instead of property.
The IRS back in March issued guidance saying virtual currencies would be treated as property, not currency, for tax purposes. That would mean that changes in value of the currency would be treated as capital gains for taxpayers depending on the value at purchase, with bitcoin investors treated akin to stock investors.
Stockman, who introduced his bill last month, say that would hold virtual currencies back.
Here’s what Stockman says in his “Dear Colleague” letter looking for co-sponsors:
Currently, capital gains taxes are imposed on any virtual currency transaction, based on any loss or gain to the change in the virtual currency’s value. This makes virtual currency transactions burdensome, as people engaged in these transactions are required to record every transaction they make.
For this very reason, it is time to change the tax status of virtual currency to foreign currency. Allowing Americans to pay sales taxes on virtual currency transactions is common sense and would help this nascent industry flourish.
In addition to requiring the IRS to designate virtual currencies as foreign currencies, Stockman’s bill would place a five-year moratorium on capital gains taxes on virtual currencies.
Stockman’s support of virtual currencies is clear in his letter, where he writes that “virtual currency is the future. It gives people more freedom and autonomy to spend their money as they please and would open up global markets to small businesses.”
It’s a different view from West Virginia Democrat Joe Manchin III, who has called for Bitcoin to be prohibited over concerns about instability and use in illegal activity