How will Biden's budget affect cryptocurrencies?

U.S. President Joe Biden's proposed budget, set to be unveiled Thursday, will include a provision to close tax loss harvesting on crypto transactions. A White House official confirmed the budget will include a tax provision intended to reduce wash sales trading by crypto investors.

Will Biden impose a tax on cryptocurrency miners?

The administration of U.S. President Joe Biden has proposed an excise tax on cryptocurrency miners equal to 30 percent of the cost of the electricity they use, and plans to eliminate tax-deductible losses related to wash-trading of crypto tokens, according to a U.S. Department of the Treasury’s document published Thursday.

Can cryptocurrencies be taxed?

A White House official confirmed the budget will include a tax provision intended to reduce wash sales trading by crypto investors. At present, investors can sell any cryptocurrencies at a loss, claim the loss on their taxes and then buy the same amount and type of cryptocurrencies again.

How much will a new crypto tax deductible provision raise?

The new provision would raise $24 billion, according to the White House. Currently, crypto sales aren’t subject to the same rules that investors in stocks or bonds have to follow. Investors can sell crypto investments at a loss, take the tax-deductible loss to reduce their tax burden, and buy right back into the same investment.