By - Ipsita Sarkar
Highlights
- President Joe Biden signed a US$1 trillion infrastructure bill into law on Monday.
- The legislation requires the crypto exchanges to issue a 1099-B form.
- Bitcoin (BTC) and Ethereum (ETH) prices fell more than 5% on Tuesday.
President Joe Biden signed a US$1.2 trillion bipartisan infrastructure bill into law on Monday after more than a year of discussions with lawmakers.
Besides improving the infrastructure, it is expected to spur economic growth and create jobs.
Of the total amount, US$550 billion will be spent on building transportation, 5G network, and utilities. In addition, US$110 billion would be allocated for roads, bridges, and other projects.
The law also has provisions for spending US$66 billion for freight and passenger rail network and US$39 billion for public transit systems. Also, US$65 billion have been allotted for broadband expansion as the pandemic showed the importance of connectivity.
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Before signing it into law, President Biden had said: "We're finally getting this done". He said the nation is moving forward with the bill, sending a positive message to the Americans that their life is "going to change for the better". However, the funding will be done over five years, and it may take months or years for the major projects to begin.
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Will the infra law impact the crypto industry?
Meanwhile, the infrastructure bill also includes some new legislation that the crypto traders should be aware of. According to the new law, the brokers or crypto exchanges will have to issue a 1099-B form, i.e., the exchanges will have to report the crypto transaction details directly to the Internal Revenue Service (IRS).
The experts think that this move may create challenges for crypto traders. For instance, the reported information to the IRS by investors who use their crypto wallet is likely to differ from the exchanges' report, as the exchanges will only have a limited view into how much these traders have paid for the cryptos in the first place.
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What should investors do to stay on the right side of the law?
Investors should keep a detailed track of their transactions, including what they pay for the crypto to reconcile with the exchanges' reports to the IRS. In addition, crypto investors should consult with a tax professional with knowledge about crypto to help them report their investments.
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Bottomline
The IRS had regarded cryptocurrency as taxable property even before the new legislation came. But the required reporting raises the investors' stakes in making sure that they are reporting their activity transparently and accurately. However, following the news, the crypto prices tumbled on Monday. Meanwhile, cryptos like Bitcoin (BTC) and Ethereum (ETH) continued their decline on Tuesday after hitting their record highs in recent sessions. The price of Bitcoin plunged 5.50% to US$60,188.31 at 1:52 pm ET, while Ethereum sank 7.03% to US$4,251.99 at 1:53 pm ET on Nov 16.