President Trump is toying with shaking up the capital gains tax. Should Bitcoin investors care, or would the changes just be white noise? | Source: (i) AP Photo/Jacquelyn Martin (ii) Shutterstock; Edited by CCN
By CCN Markets: President Trump has been bandying about the idea of reforming how capital gains are calculated. What impact, if any, would those changes have on Bitcoin investors?
Trump Teases Capital Gains Reform – Or Did He?
When you sell stocks, bonds, or even Bitcoin, the profits you receive are considered capital gains, according to the IRS, and subject to a tax rate based on your income and how long you held the investment.
Trump first broached capital gains tax reform on Tuesday, only to deny it on Wednesday. At one of his impromptu pressers, he told reporters he had the authority to make cuts to the tax on investment income, which disproportionately affects wealthier Americans.
Trump has reportedly discussed tying capital gains to the inflation rate, which would reduce the amount of profit subject to taxation.
“I’ve looked at indexing for a long time; it’s not something I love,” Trump said Wednesday. “I think it’s probably better for the high-income people and I’m not looking to do that. I want to do for the workers. I’m looking to do for the middle income people.”
John Madison, CPA and personal financial counselor at Dayspring Financial Ministry, told CCN that inflation indexing could result in substantial tax savings for Bitcoin investors who sell coins at a profit.