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 crypto and taxes. This revised bill comes as Congress is set to address taxes in the coming months, with crypto potentially being part of the discussion. The PARITY Act was initially released in December and has been re-released for further review. One notable change is the section addressing 'de minimis' gains, which allows for small transactions to be exempt from tax reporting.
The industry has long advocated for a de minimis exemption for limited transactions, making it easier for individuals to use crypto for small purchases without having to report capital gains or losses. The revised bill removes the $200 threshold for de minimis exemptions and creates 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 this bill are uncertain, industry participants expect a strong push to include crypto in any tax legislation that becomes law.