Late last month, Representatives Steven Horsford (D-Nev.) and Max Miller (R-Ohio) reintroduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields (PARITY) Act, which seeks to update the US approach to crypto taxation. As Congress prepares to address tax legislation in the coming months, the crypto industry may be impacted, making it essential for US crypto holders to understand the potential changes. The revised PARITY Act, initially released in December, has undergone significant changes, particularly in its treatment of 'de minimis' gains. The new version removes the $200 threshold for exempting small transactions from tax reporting and instead 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. Although the bill's future is uncertain, industry participants expect a strong push to include crypto in any upcoming tax legislation.