After expressing his support for the cryptocurrency industry and accusing his opponent in the United States presidential race, Joe Biden, of perceived hostility towards the sector, former US President Donald Trump has announced plans for significant taxation cuts if elected.
During a campaign rally on May 12, Trump criticized President Biden's latest budget proposal, which includes new and increased capital gains taxes that could affect crypto investors. Trump pledged to implement the "biggest tax cut" for all social classes instead of Biden's proposed tax hike.
Following the standard Republican approach, Trump's campaign proposal aims to lower the maximum capital gains tax rate to 15%, consistent with his previous term where the rate was reduced to a maximum of 20%.
However, the tax bill signed into law by Trump in December 2018 does not directly address digital assets like Bitcoin (BTC), Ethereum (ETH), and tokens issued through initial coin offerings (ICOs). While it indirectly impacts crypto investors, traders, issuers, and miners, it does not provide clarity on their tax obligations.
Some attorneys believe that capital gains taxes might still apply to crypto assets, despite uncertainty. There's also a debate among crypto investors about whether certain transactions, such as trading Bitcoin for Ethereum, qualify as like-kind exchanges exempt from section 1031 of the tax code.
Jeremy Naylor, a partner at Proskauer Rose LLP, explained that taxpayers treating crypto-for-crypto exchanges as like-kind are taking a risk, as the IRS may disagree. Under the new law, such exchanges are likely not permissible.
The exemption previously applied to "property of like kind" only for "real property of like kind," excluding crypto assets. Consequently, crypto is subject to capital gains tax, and Trump's proposed cuts would mean lower taxes for crypto traders and investors.
Despite Trump's evolving stance on crypto, from initially labeling Bitcoin a scam to launching his own non-fungible token (NFT) collection and expressing openness to crypto payments, he has recently stated that he is "fine with" crypto. He has also pledged to allow crypto businesses to operate in the US and accept crypto contributions to his campaign.
After expressing his support for the cryptocurrency industry and accusing his opponent in the United States presidential race, Joe Biden, of perceived hostility towards the sector, former US President Donald Trump has announced plans for significant taxation cuts if elected.
May 2024, Cryptoniteuae