U.S. President Joe Biden\u2019s upcoming budget proposal has a few surprises for crypto traders and investors, including a proposed doubling of capital gains for certain investors and a crackdown on crypto wash sales.\u00a0<\/p>\n
The Biden administration is set to release its fiscal 2024 budget plan on Mar. 9 which is reportedly aimed at reducing the deficit by almost $3 trillion over the next decade. It also includes changes to crypto tax treatment with the aim of raising around $24 billion, according to reports.<\/p>\n
One of these proposals includes an end to a strategy in which a crypto trader sells assets at a loss for tax purposes, known as tax-loss harvesting, before repurchasing them immediately after, according to the WSJ.<\/p>\n
Such a strategy is not permitted when stocks and bonds are involved \u2014 under current wash sale rules\u00a0\u2014 However, crypto is currently not under these same rules as digital assets have not been classified as securities. <\/p>\n
However, it appears that the U.S. government is looking to change that. <\/p>\n
Speaking to Cointelegraph, Danny Talwar, from crypto tax software firm Koinly commented:<\/p>\n
\u201cThis is an inevitable consideration for the US which, if implemented, will see it on par with other jurisdictions such as Canada and Australia, where crypto wash sales apply.\u201d<\/p><\/blockquote>\n
\u201cIf the rule is applied, the timing is significant as many crypto holders who entered the crypto space on the back of 2021 market peaks are suffering from heavy losses,\u201d he added. <\/p>\n