Crypto transactions under $600, will benefit from a de minimis tax exemption provided under the Token Taxonomy Act (TTA). Jerry Brito, executive director of Coin Center, revealed this at a Consensus 2019 held on May 13.
Under the de minimis tax exemption Crypto owners will not have to report their gain to the Internal Revenue Service (IRS) when the amount is below $600.
The scenario is in contrast with how the treatment of small foreign currency gains was before Congress introduced the de minimis proviso in the 1990s. At that time, if any individual would purchase foreign currency and later take a vacation to another country, any capital gains amount gotten when holding the currency technically should be reported.
Specifically, if things such as laptops or plane tickets are bought using cryptocurrencies, the obligation is to report such capital gains according to Brito. Even when an individual writes a smart contract which requires small amounts of Ether or other cryptocurrencies, they should be reported. Brito also stated that the United States’ tax authority could also ask an individual to report such kinds of expenditures.
Cryptocurrencies will no longer be classified as a form of security when the TTA passes. Apart from providing regulatory certainty for the crypto statutes compliance and enforcement, TTA is expected to delimit Federal Trade Commission (FTC) and Commodity Futures Trading Commission (CFTC) jurisdiction.