Rep. Ted Budd’s (R-NC) bill to fix ‘like-kind’ transactions is positive development
WASHINGTON, DC, Jan. 29, 2019 (GLOBE NEWSWIRE) — (via Blockchain Wire) The Digital Currency Trade Association (DCTA) has announced support for the idea of digital asset tax reform. The DCTA is organized as a “business association” under IRS tax law 501(c)(6) and the goal is to organize and educate on the benefits of blockchain technology. This organization representing the interests of all those in the chain of custody or with a financial interest the future of digital currency and assets. The two areas of focus for the association is stopping regulatory impediments and ill-conceived tax policies that will hamper the growth of digital asset proliferation in the United States.
The Tax Cut and Jobs Act of 2017 contained a statutory tax on common transfers of cryptocurrency in a way that will push them all out of the United States. Section 1031 of tax law treats crypto-to-crypto trades as outside the scope of “like-kind” exchanges of property. The law applied as of January 1, 2018, therefore many who have made these transactions are now learning from their tax attorneys that they have a potential massive new reporting and tax requirement. In other words, every swap of digital coins or tokens for coins or tokens are a taxable event. This is a ridiculous outcome of the tax reform effort that seems like an unintended consequence of the tax reform effort.
The DCTA supports the idea behind legislation introduced at the end of 2018 by Rep. Ted Budd (R-NC). The bill, H.R. 7361, would create a special rule: “the exchange of virtual currency for virtual currency of like kind shall be treated in the same manner as the exchange of real property for real property of like kind.” This digital asset reform effort would exclude gains or losses for every coin or token to coin or token transaction. The DCTA is committed to an educational effort to help Congress, the Trump Administration and the American public to push for this idea, and apply it retroactively, so that an effort to fix this law would allow the United States to engage in tax competition with other jurisdictions that have become friendly to an idea that will help the U.S. economy grow.
The newly appointed Executive Director, Manny Alicandro said, “Consistent with the mission of the DCTA, we are in full support of the idea of Rep. Budd’s bill and the idea that the exchange of like-kind digital assets should not be a taxable event.”
The founding members of the DCTA are the following: Enzo Villani and Michael Terpin of Transform Group, Velocity Ledger, Alt5Sigma, Swarm Fund, XREX, Y2X, Delaware Board of Trade, Blockchain Revolution, and Bitcoin Generation.
Digital Currency Trade Association