On July 12, U.S. Sens. Cynthia Lummis (R-Wyo) and Kirsten Gillibrand (D-N.Y.) reintroduced sweeping crypto legislation that would impact a number of tax issues touched on in the call for input from Senators Ron Wyden (D-Ore.) and Mike Crapo (R-Idaho), including eliminating the qualified appraisal requirement for donors of “actively traded” crypto assets seeking to qualify for a charitable deduction.
Additionally, the bill from Sens. Lummis and Gillibrand would provide a de minimis exclusion of up to $200 per transaction from a taxpayer’s gross income for use of crypto assets for payment for goods and services, under specified conditions. While it’s unclear whether making transactions under $200 tax exempt in limited circumstances would substantively impact charitable giving, proposals that would exempt larger or a greater number of crypto transactions from taxation could more clearly impact charitable giving and may continue to crop up as more lawmakers become educated on how digital assets are used.
The proposal from Sens. Lummis and Gillibrand is wide-ranging and is unlikely to pass as a stand-alone bill. Still, provisions from the pair’s proposal could be tacked onto other legislative vehicles.
Lawmakers may consider a year-end tax package that could carry some of the senators’ proposed tax reforms, including eliminating the appraisal requirement for larger crypto gifts. The prospects for end-of-year tax legislation will likely come into focus over the coming months as GOP leadership attempts to build consensus around a Republican tax package seen as an opening offer ahead of potential bipartisan negotiations on tax policy.