Crypto Transactions Under $50 May Soon be Exempt From Capital Gains Tax

Users will not have to pay capital gains taxes when the asset appreciates less than $50 for personal transactions

article-image

Sen. Pat Toomey | Source: Shutterstock

share

key takeaways

  • A new bipartisan bill will change how crypto transactions are taxed
  • As the law currently stands, anyone that uses crypto for any transaction, regardless of amount, must report gains on the value of the cryptoasset sent

Two senators have proposed the latest bipartisan federal legislation addressing cryptocurrency — this time in a bid to exempt digital asset purchases of $50 or less from steep capital gains taxes. 

Sens. Pat Toomey, R-Pa., and Kyrsten Sinema, D-Ariz., are sponsoring the bill — the Virtual Currency Tax Fairness Act — which would additionally prevent the IRS from collecting taxes from retail traders when the asset in question appreciates less than $50. 

“While digital currencies have the potential to become an ordinary part of Americans’ everyday lives, our current tax code stands in the way,” Toomey said in a statement. “The Virtual Currency Tax Fairness Act will allow Americans to use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee.”

As the law currently stands, anyone using crypto for any transaction, regardless of the amount, must report gains on the value of the cryptoasset. 

“I’m glad it seems to be indexed for inflation, because $50 now is going to be pretty meaningless going forward,” Kell Canty, CEO of Ledgible, said. “If we end up having inflation along the lines of what we’re seeing currently.”

To prevent buyers and sellers from taking advantage of the policy, the bill includes an aggregation rule to treat all sales or exchanges that are part of the same transaction as one sale or exchange. 

The provision is intended to prohibit someone from breaking up a single purchase into numerous transactions under $50 (or under $50 gain) for each of the virtual currency exchanges to qualify for the de minimis exemption.

“For example, if I were to purchase something that is $500 with crypto (assume for simplicity, you have a basis of $0 in the crypto, so the gain is $500), without the aggregation rule, I could break that purchase into 10 separate transactions (think swiping your credit card 10 different times) and game the system to qualify for the de minimis exemption,” a Toomey aide told Blockworks. “The aggregation rule treats all 10 transactions as what it really is — one $500 transaction — and therefore the transaction would not be eligible for the de minimis exemption.” 

The aide requested anonymity because they weren’t authorized to speak to the media. 

The bill, if passed, could help increase the adoption of cryptocurrencies for transaction purposes, proponents say. 

“The IRS first addressed the issue of taxation of virtual currency transactions in 2014, declaring that virtual currency should be treated as property for tax purposes,” Perianne Boring, founder and CEO of the Chamber of Digital Commerce, said. “That classification was a major setback for adoption because taxpayers were required to track gains and losses in the value of virtual currency each time it was used, hindering retail adoption.” 

More people have been using cryptocurrencies for transactions in recent years. In 2020, the total number of transactions processed globally over the Bitcoin network surpassed 150 million, up from around 80 million in 2018, according to data from Digiconomist. 

“In terms of regulatory and tax implications, it should be the same way, just a fair equal footing for all payment methods, and that includes crypto,” Canty said.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (10).png

Research

Innovations on Aptos’ technical design through Raptr, Shardines, and Zaptos approach near-optimal latency and throughput by unlocking 100% utilization of network resources, with the capacity to settle 260k transactions per second with latencies less than 800ms. The original Move language was revamped with the launch of Move 2, supporting more expressivity in smart contract logic and a scalable ability to interact with high volume datasets. The ecosystem has benefitted from strong asset inflows, now hosting over $1.3B in stablecoins, $450M in bridged BTC, and $530M in RWAs. Activity in the Aptos ecosystem has grown notably over the past year, with monthly application revenue reaching ~$835k and monthly DEX volumes growing to over $5B, both at new all time highs.

/

article-image

Interchain Labs will focus on sovereign L1s and institutional demand, abandoning plans for smart contracts on the Cosmos Hub

article-image

Also, only three tokens have outperformed bitcoin so far this year: XMR, HYPE and SKY

article-image

The fund group has submitted proposals in recent months for other funds that would hold litecoin, solana, XRP, HBAR, Sui and others

article-image

Momentum’s back — BTC leads, risk assets follow

article-image

Ondo Finance’s acquisition of blockchain development company Strangelove follows its buy of Oasis Pro

article-image

Cryptocurrency and stock traders alike had a lot to unpack Wednesday