US Congress members Steven Horsford and Max Miller have reintroduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields Act, which seeks to update the US approach to cryptocurrency and taxes. The proposed legislation is significant for US crypto owners, as they will be required to report their digital asset holdings and transactions. The bill was initially released in December and has been revised for further review.
One notable change is the section addressing 'de minimis' gains, which could exempt small transactions from tax reporting. The industry has long advocated for a de minimis exemption to simplify transactions, such as buying coffee with crypto, without incurring a tax burden. The revised bill removes the $200 threshold for stablecoin exemptions and introduces a deemed basis of $1 for exchanges.
Additionally, the bill applies wash sale rules to digital asset transactions and distinguishes between 'passive staking' and trading activities. While the next steps for the bill are uncertain, industry participants expect a strong push to include crypto in upcoming tax legislation.