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 bill could have significant implications for individuals who own cryptocurrency in the US, as they will be required to report their digital asset holdings and transactions. The revised bill includes changes to the treatment of 'de minimis' gains, which refer to small transactions that are exempt from tax reporting. The latest version of the bill removes the $200 threshold for exemptions and instead states that no gain or loss will be recognized on the sale of a regulated payment stablecoin unless the taxpayer's basis in the stablecoin is less than 99 percent of its redemption value.
The bill also 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 cryptocurrency in any upcoming tax legislation.