- The president wants to ban the fictitious sale strategy
- As well as increase the tax rate on capital gains in cryptocurrency
Today, March 9, Biden’s office will present a draft budget for 2024. It primarily aims to reduce the deficit by nearly $3 trillion over the next decade. But, what is much more interesting, there are several unpleasant surprises in the draft budget for those who invest in cryptocurrency.
Dummy sale strategy
This is one of the ways to reduce tax deductions from cryptocurrency receipts. Recall that in the United States there is a law according to which a trader is obliged to pay from 10 to 37% of income in Central Asia, including staking.
The fictitious sale strategy allows you to reduce the tax rate. Its essence lies in the fact that a trader sells assets at a loss in order to reduce the overall rate of capital growth, after which he buys them, for example, through a front man.
This strategy is prohibited in the stock market. But cryptocurrencies are not classified as securities, and therefore do not fall under this rule. Biden wants to change this in order to increase tax deductions.
The second unpleasant surprise for crypto traders is the new cryptocurrency capital gains fees. The rate for investors with an income of $1 million will increase from 20% to 39.6%.
But that’s not all. According to Bloomberg, Biden plans to increase the collection on luxury and raise the rate for large corporations. It is due to this that the president expects to cover budget losses, at least partially.
At the same time, if this innovation comes into force, then soon similar rules will be introduced in Australia and Canada. So says Koinly spokesman Danny Talwar.