U.S. Senator Cynthia Lummis is attempting to amend the massive budget bill to eliminate taxes on small-scale cryptocurrency transactions below $300, capping overall transactions at $5,000 per year. This initiative aims to reduce the tax burden on individuals engaging in minor digital asset activities, potentially encouraging wider participation in the crypto space. The amendment also addresses existing issues with the taxation of staking, digital asset mining, and crypto lending. Currently, capital gains are taxed at both the acquisition and sale of assets gained through staking and mining, which Lummis seeks to remedy by taxing rewards only upon their sale. Additionally, the proposed amendment may tackle the wash-trading loophole that allows investors to conduct strategic tax-loss harvesting by selling at a loss and repurchasing immediately. The amendment is part of a larger discussion within an ongoing Senate vote-a-rama process, amidst significant partisan debate over the bill's provisions and potential impacts on the budget deficit.

Source đź”—