US Congress members Steven Horsford and Max Miller have reintroduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields (PARITY) Act, which seeks to update the US approach to cryptocurrency and taxes. The proposed legislation is particularly relevant as Congress is expected to address tax reforms in the coming months, potentially including cryptocurrency. This development is crucial for US-based cryptocurrency owners, as they will need to report their digital asset holdings and transactions.
The revised PARITY Act, initially released in December and re-released on March 26, introduces changes to the 'de minimis' gains section. De minimis exemptions allow for small transactions to be exempt from tax reporting, making it easier for individuals to conduct minor transactions without incurring significant tax burdens. The original version of the bill proposed a $200 threshold for de minimis exemptions for regulated payment stablecoins, but the revised version removes this threshold and introduces a deemed basis of $1 for exchanges.
The latest draft also applies wash sale rules to digital asset transactions and distinguishes between 'passive staking' and trading activities. Although the next steps for the bill are uncertain, industry participants expect a strong push to include cryptocurrency in any upcoming tax legislation. The outcome of this bill may have significant implications for the cryptocurrency industry and its users in the US.