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Biden Administration Proposes Major Changes to Crypto Taxation – Here's What You Need to Know

US President Joe Biden has proposed major changes to the tax rules surrounding crypto, but the plan first has to be negotiated and approved by Republican-controlled Congress. Biden’s proposal on crypto taxes is part of his budget plan for the 2024 fiscal year, which is expected to be unveiled on Thursday this week, the Wall Street Journal reported. Included in the budget is a new minimum tax on so-called unrealized capital gains of 25%, which could potentially hit some American high-net-worth crypto owners hard. That proposal has been known for some time and has in the past been ridiculed by the crypto community given the wild swings in the valuation of major digital assets from one year to another: Among the other changes is an attempt to prevent crypto holders from engaging in so-called ‘loss harvesting’. The technique involves selling underwater crypto holdings before year-end and then buying the same coins back again shortly after in order to deduct the loss from the tax bill. The same proposal was discussed in the last Congress but did not pass at the time. The proposed changes to the tax treatment of crypto is expected to generate $24 billion in revenue for the government. Overall, the proposed budget is said to cut the federal budget deficit by nearly $3 trillion over the next decade.

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