Recently, US Congressmen Steven Horsford and Max Miller reintroduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields Act, which seeks to update the country's approach to cryptocurrency and taxes. As Congress prepares to address tax legislation in the coming months, cryptocurrency may be included, making it crucial for US crypto owners to understand the potential implications.
The PARITY Act was initially released in December and revised on March 26 for further review. One notable change is the section on 'de minimis' gains, which allows for small transactions to be exempt from tax reporting. The industry has long advocated for a de minimis exemption to simplify transactions like 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, it applies wash sale rules to digital asset transactions and distinguishes between 'passive staking' and trading activities. While the bill's next steps are uncertain, industry participants expect a strong push to include crypto in any upcoming tax legislation.