[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3273 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 3273
To provide for the tax treatment of forked convertible virtual
currency.
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IN THE HOUSE OF REPRESENTATIVES
May 17, 2021
Mr. Emmer (for himself and Mr. Soto) introduced the following bill;
which was referred to the Committee on Ways and Means
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A BILL
To provide for the tax treatment of forked convertible virtual
currency.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Safe Harbor for Taxpayers with
Forked Assets Act of 2021''.
SEC. 2. TAX TREATMENT OF FORKED CONVERTIBLE VIRTUAL CURRENCY.
(a) Exclusion From Gross Income.--Part III of subchapter B of
chapter 1 of the Internal Revenue Code of 1986 is amended by inserting
after section 139H the following new section:
``SEC. 139I. EXCLUSION OF CONVERTIBLE VIRTUAL CURRENCY RECEIVED IN A
HARD FORK.
``(a) In General.--No amount shall be included in gross income by
reason of the receipt of any forked convertible virtual currency.
``(b) Forked Convertible Virtual Currency.--For purposes of this
section--
``(1) Forked convertible virtual currency.--The term
`forked convertible virtual currency' means, with respect to
any taxpayer, any convertible virtual currency to which the
taxpayer becomes entitled by reason of a hard fork.
``(2) Convertible virtual currency.--The term `convertible
virtual currency' means any digital representation of value
that--
``(A) functions as a medium of exchange, a unit of
account, or a store of value;
``(B) does not have legal tender status; and
``(C) has an ascertainable equivalent value in
legal tender or is used as a substitute for legal
tender.
``(3) Hard fork.--The term `hard fork' means, with respect
to any convertible virtual currency, any material change in the
shared digital ledger which is used to verify by consensus
transactions in such currency if such change results in the
maintenance of independent shared digital ledgers with respect
to such currency.
``(4) Constructive receipt.--Receiving forked virtual
currency shall include any right to receive (or other
constructive of) such virtual currency.''.
(b) Safe Harbor Period for Penalties Relating to Tax Treatment of
Hard-Forked Virtual Currency.--
(1) In general.--In the case of a taxpayer who during the
applicable period receives forked convertible virtual
currency--
(A) no penalties or additions to tax under part II
of subchapter A of chapter 68 of the Internal Revenue
Code of 1986 shall apply with respect to any portion of
an underpayment or understatement of tax that is
attributable to the taxpayer's attempt during such
period to comply with the tax treatment under such Code
of the receipt of such virtual currency (or any
disposition of such currency during such period); and
(B) no penalties or additions to tax under sections
6651, 6654, 6655, 6656, 6698, and 6699 shall apply for
any failure during the applicable period to file a
return or report or make a payment of tax to the extent
such failure is attributable to filing or payment
requirements relating to the receipt of such virtual
currency (or any disposition of such currency during
such period).
(2) Definitions and special rules.--For purposes of this
subsection--
(A) Applicable period.--The term ``applicable
period'' means any period beginning before the date of
the enactment of this Act and ending on the date the
Secretary issues regulations or guidance, or
legislation is enacted, that prescribes each of the
following:
(i) Rules for calculating and allocating
the basis of forked convertible virtual
currency.
(ii) Rules for calculating the fair market
value of forked convertible virtual currency at
any given time.
(iii) Rules for determining the holding
period of forked convertible virtual currency.
(B) Other terms.--Terms used in this subsection
which are also used in section 139I of the Internal
Revenue Code of 1986 shall have the same meaning as
when used in such section 139I.
(c) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 of such Code is amended by inserting after
the item relating to section 139H the following new item:
``Sec. 139I. Exclusion of convertible virtual currency received in a
hard fork.''.
(d) Effective Date.--The amendments made by this section shall
apply to forked convertible virtual currency (as defined in section
139I of the Internal Revenue Code of 1986 as added by this section)
received after the date of the enactment of this Act.
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