- Senators Lummis and Moreno have proposed crypto tax relief in the US.
- The Senators requested that crypto firms pay tax only on realized gains.
- Crypto tax relief in the US would significantly boost cryptocurrency adoption.
Famous US pro-crypto Senator Cynthia Lummis, alongside her colleague Senator Bernie Moreno, has asked the US government to review its cryptocurrency tax regime.
In her latest proposal, made public on May 12, Lummis and Moreno, suggested a new rule to relieve US companies from what they term an unfair crypto tax burden, specifically by changing how unrealized gains on digital assets are treated.
Lummis and Moreno proposed a new rule requiring crypto firms to pay taxes only on realized gains, targeting the Corporate Alternative Minimum Tax (CAMT). The CAMT is a relatively new rule enacted in 2022 as part of the Inflation Reduction Act. The Act requires corporations whose revenue exceeds $1 billion annually to pay at least 15% in taxes. The Lummis-Moreno crypto tax proposal argues that applying this to unrealized crypto gains harms US crypto firms.
Lummis Calls Current Crypto Tax Structure “Unintended,” Cites Fair Competition
In the meantime, Lummis shared a copy of the proposal on social media, highlighting the potential risk of having US companies taxed more than foreign competitors on digital finance. The Senator described the running tax structure on digital asset companies as unintended, citing the need for fair competition if the US wants to lead the world in digital assets.
Crypto analysts think getting the US government to accept Senator Lummis’ latest proposal would be massive for the crypto industry. One such analyst commented about this in a podcast, noting that achieving this through an executive order or a legislative bill would significantly boost cryptocurrency adoption.
Related: No Crypto Tax? White House ‘Czar’ Shoots Down Transaction Fee
The analyst cited the possibility of getting the proposal passed, considering that the US government has given tax breaks to specific industries. Hence, crypto users have the right to be optimistic and expect a reform in the government’s tax requirements for cryptocurrency companies, significantly increasing the crypto market’s bullish momentum.
Proposal Aims to Counter “Unfair” FASB Digital Asset Accounting Rule
Meanwhile, Lummis and Moreno aim to use the latest proposal to counter a new rule they consider unfair to the crypto sector.
Related: US Congress Targets Crypto Bill by 2025: Pro-Crypto Senator Cynthia Lummis Drives Senate Agenda
The Financial Accounting Standards Board (FASB) now requires companies to mark digital assets at fair market value on their financial statements. This FASB rule, the Senators deemed as unfair when applied under CAMT. They have now urged the US Treasury to use its authority to revise this fair market value accounting interaction according to their proposal for unrealized gains.
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