Late last month, Congressmen Steven Horsford and Max Miller reintroduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields Act, seeking to modernize the US approach to crypto 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 for their digital asset holdings and transactions. The revised PARITY Act, initially released in December and re-released on March 26, introduces changes, including a section on 'de minimis' gains.
This exemption would allow for small transactions to be exempt from tax reporting, making it easier for individuals to use crypto for everyday purchases without incurring capital gains or losses. The latest draft of the bill removes the $200 threshold for de minimis 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. Although the next steps for this bill are uncertain, industry participants expect a strong push to include crypto in any upcoming tax legislation.