{"id":18581,"date":"2023-03-11T00:39:55","date_gmt":"2023-03-11T00:39:55","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/biden-budget-proposal-targets-crypto-investors-using-like-kind-exchange-provision-plan-aims-to-tax-crypto-miners-30-bitcoin-news\/"},"modified":"2023-03-11T00:39:55","modified_gmt":"2023-03-11T00:39:55","slug":"biden-budget-proposal-targets-crypto-investors-using-like-kind-exchange-provision-plan-aims-to-tax-crypto-miners-30-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/biden-budget-proposal-targets-crypto-investors-using-like-kind-exchange-provision-plan-aims-to-tax-crypto-miners-30-bitcoin-news\/","title":{"rendered":"Biden Budget Proposal Targets Crypto Investors Using Like-Kind Exchange Provision; Plan Aims to Tax Crypto Miners 30% \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
\n<\/p>\n

\n
\n<\/header>\n
\n\n<\/div>\n

On Thursday, the Biden administration released the U.S. president\u2019s 182-page budget proposal for the fiscal year 2024, which aims to \u201cgrow the economy from the bottom up and middle out.\u201d The budget includes an $835 billion increase in military spending, but the administration claims it will reduce the deficit by $3 trillion over the next decade. Additionally, the budget proposes \u201cclosing a loophole that benefits wealthy crypto investors\u201d and plans to gradually introduce a 30% tax on the electricity used in cryptocurrency mining.<\/strong><\/p>\n

Biden Budget Aims to Reduce Deficit by Raising Taxes<\/h2>\n

Unlike many past U.S. presidents who promised no new taxes, president Joe Biden has no issue with imposing more taxes on American people and businesses. However, the Biden administration claims<\/a> that the higher taxes are targeted at the country\u2019s wealthy, and the latest budget proposal aims to add a 25% minimum tax on the wealthiest Americans.<\/p>\n

The White House budget proposal<\/a> is subject to review, modification, and approval and is not yet finalized or set in stone. Biden, of course, will be running for reelection next year and faces the possibility of losing to another candidate. President Biden\u2019s budget plan calls for increasing the corporate tax rate from 21% to 28%, as well as raising taxes on fossil fuel companies involved in oil and gas.<\/p>\n

The administration contends that the current tax code provides wealthy Americans with \u201cspecial treatment\u201d that enables many of them to pay lower rates through tax planning and \u201cloopholes,\u201d according to the Biden administration\u2019s budget fact sheet. The plan also addresses \u201cwealthy crypto investors\u201d and real estate investors. In the \u201cCloses Tax Loopholes\u201d section of the Biden budget, the plan references Section 1031 of the Internal Revenue Code.<\/p>\n

The Internal Revenue Code section 1031, sometimes referred to as a \u201clike-kind exchange,\u201d permits individuals or businesses to delay paying taxes on certain types of property they exchange for similar property. This tax provision was first introduced in 1921.<\/p>\n

Eliminating the like-kind exchange provision or the 1031 exchange rule could have serious consequences for crypto investors. This could result in higher tax bills, administrative burdens, and could potentially discourage investment in the market. President Biden\u2019s budget proposal could lead to a substantial rise in tax bills for active crypto traders who frequently engage in trading.<\/p>\n

2017 Changes to 1031 Exchange Rule; Biden\u2019s Plan Aims to Tax Crypto Miners<\/h2>\n

The 1031 exchange rule underwent significant changes in 2017 with the passage of the Tax Cuts and Jobs Act. The rule was restricted to real property, and a transition rule was introduced to provide a grace period for taxpayers who had already engaged in like-kind exchanges of personal property. Additionally, the 2017 changes established a threshold for taxable gains.<\/p>\n

President Biden\u2019s budget proposal contends that the \u201cultra-wealthy\u201d exploit these tax incentives provided by the provision to \u201caccumulate tax-free fortunes.\u201d However, some argue that not only billionaire types benefit from the like-kind exchange provision. It also offers lower-income and middle-class investors the chance for tax deferral, which can enhance their liquidity and diversify their investments.<\/p>\n

President Biden\u2019s budget plan also targets cryptocurrency miners with taxes by proposing to impose an excise tax on crypto mining operations that consume electricity. The tax would gradually increase to 30%. According to the proposal, \u201cfirms engaged in digital asset mining would be required to report the amount and type of electricity used as well as the value of that electricity if purchased externally.\u201d<\/p>\n

The proposal also states that \u201cfirms that lease computational capacity would be required to report the value of the electricity used by the lessor firm attributable to the leased capacity, which would serve as the tax base.\u201d Beginning from the taxable year following December 31, 2023, the proposal would implement a phased excise tax at rates of 10%, 20%, and 30% over a period of three years.<\/p>\n

\n
\nTags in this story
\n<\/h6>\n
1031 exchange rule<\/a>, Biden<\/a>, Biden provision<\/a>, bitcoin tax<\/a>, BTC tax<\/a>, budget<\/a>, computational capacity<\/a>, corporate tax<\/a>, Crypto investors<\/a>, Crypto tax<\/a>, Cryptocurrencies<\/a>, Cryptocurrency<\/a>, deficit<\/a>, Digital Assets<\/a>, Digital Currencies<\/a>, Diversification<\/a>, Economy<\/a>, Electricity<\/a>, excise tax<\/a>, fossil fuel<\/a>, Internal Revenue Code<\/a>, IRS<\/a>, Joe Biden<\/a>, like-kind exchange<\/a>, Liquidity<\/a>, middle-out<\/a>, Military Spending<\/a>, mining<\/a>, phased tax<\/a>, presidential race<\/a>, rates<\/a>, Real estate<\/a>, Tax<\/a>, tax bitcoin<\/a>, tax BTC<\/a>, tax crypto<\/a>, tax deferral<\/a>, tax incentives<\/a>, tax loopholes<\/a>, tax planning<\/a>, taxable gains<\/a>, U.S. president<\/a>, ultra-wealthy<\/a>, wealthy Americans<\/a>, White house<\/a><\/div>\n<\/div>\n

What do you think about Biden\u2019s budget plan that raises taxes in order to lower the deficit burdens? Let us know your thoughts in the comments section below.<\/strong><\/em><\/p>\n

\n
\n\n<\/div>\n
\n
\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

\n
\n
\n<\/a>
\n<\/span>\n<\/p>\n<\/div>\n<\/div>\n

Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

\n

Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com<\/a> does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<\/div>\n

\n