You are the one! House bill proposes raising capital gains tax, including cryptocurrency investments under "wash sale" regulations

To advance President Biden's $3.5 trillion infrastructure plan budget, House Democrats have proposed a complementary tax plan that aims to increase the capital gains tax rate for high-income individuals to 28.8% and eliminate the "wash sale" loophole for cryptocurrency users.

What is a wash sale?

According to the regulations of the Internal Revenue Service (IRS) in the United States, a wash sale occurs when an individual sells stocks or securities at a loss and purchases substantially identical stocks or securities within 30 days before or after the sale, including the sale date, totaling 61 days. Currently, only stocks are subject to wash sale rules. As cryptocurrencies are classified as property according to IRS Notice 2014-21, they are not subject to wash sale regulations. More Chinese explanation

House Democrats are seeking ways to fund the $3.5 trillion budget proposal by introducing a tax plan. The tax plan, proposed by Richard Neal, the Democratic chairman of the House Ways and Means Committee, aims to raise nearly $3 trillion in taxes from the wealthy, large corporations, and investors, with the corporate tax rate increasing to 26.5% and the top individual tax rate rising to 39.6%. Richard Neal hopes to establish new wash sale rules for cryptocurrency holders, as some crypto users may use it to avoid capital gains and taxes.

If the proposal is passed and signed into law, cryptocurrency users will report taxes under the new wash sale rules starting from December 31. The House of Representatives is scheduled to vote on the proposal by September 27.

This article is authorized to be republished from Horizon News Network