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H.R. 3708 (115th): To amend the Internal Revenue Code of 1986 to exclude from gross income de minimis gains from certain sales or exchanges of virtual currency, and for other purposes.

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The text of the bill below is as of Sep 7, 2017 (Introduced). The bill was not enacted into law.

Summary of this bill

The price of bitcoin has skyrocketed in recent weeks, more than tripling in the past month. Amid this unprecedented attention on the so-called “cryptocurrency,” the Cryptocurrency Tax Fairness Act was introduced and would potentially be the first enacted law on the subject.

What is bitcoin exactly?

Bitcoin is a digital-only currency and payment system, not relying on any physical manifestation such as bills or coins.

It was originally started by a few tech-minded libertarians who disdained the federal government’s monopoly on producing and controlling the supply of money. Now the system is gaining traction as a means of purchasing and selling goods — akin to the dollars and cents …

I

115th CONGRESS

1st Session

H. R. 3708

IN THE HOUSE OF REPRESENTATIVES

September 7, 2017

(for himself and Mr. Polis) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to exclude from gross income de minimis gains from certain sales or exchanges of virtual currency, and for other purposes.

1.

Virtual currency

(a)

In general

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139F the following new section:

139G.

Gain from sale or exchange of virtual currency

(a)

In general

Gross income shall not include gain from the sale or exchange of virtual currency for other than cash or cash equivalents.

(b)

Limitation

(1)

In general

The amount of gain excluded from gross income under subsection (a) with respect to a sale or exchange shall not exceed $600.

(2)

Aggregation rule

For purposes of this subsection, all sales or exchanges which are part of the same transaction (or a series of related transactions) shall be treated as one sale or exchange.

(c)

Virtual currency

For purposes of this section, the term virtual currency means a digital representation of value that is used as a medium of exchange and is not otherwise currency under section 988.

(d)

Inflation adjustment

In the case of any taxable year beginning in a calendar year after 2018, the dollar amount in subsection (b) shall be increased by an amount equal to—

(1)

such dollar amount, multiplied by

(2)

the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2017 for calendar year 1992 in subparagraph (B) thereof.

Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $50.

.

(b)

Clerical amendment

The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139F the following new item:

Sec. 139G. Gain from sale or exchange of virtual currency.

.

(c)

Reporting of gains or losses

The Secretary shall issue regulations providing for information returns on virtual currency transactions for which gain or loss is recognized.

(d)

Effective date

The amendments made by this section shall apply with respect to transactions entered into after December 31, 2017.