US Congressmen Steven Horsford and Max Miller have reintroduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields Act, which seeks to update the country's approach to cryptocurrency and taxes. The bill is expected to be part of a broader discussion on tax legislation in the coming months, which may have significant implications for individuals who own cryptocurrency in the US. The revised bill includes changes to the treatment of 'de minimis' gains, which refer to small transactions that are exempt from tax reporting.
The industry has long advocated for a de minimis exemption to make it easier for individuals to use cryptocurrency for everyday transactions without incurring significant tax burdens. The latest version of the bill removes a previous $200 threshold for exemptions and instead creates a deemed basis of $1 for exchanges. It 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 tax legislation that becomes law.