Representatives Steven Horsford (D-Nev.) and Max Miller (R-Ohio) have reintroduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields (PARITY) Act, which seeks to modernize the US approach to cryptocurrency and taxation. The US Congress is set to address tax reforms in the coming months, and cryptocurrency may be included in these discussions. This development is crucial for US-based cryptocurrency owners, as they will be required to report their digital asset holdings and transactions.
The PARITY Act was initially released in December as a discussion draft and was re-released on March 26 for further review. One of the most notable changes is the section addressing 'de minimis' gains, which refers to exemptions for small transactions. The industry has long advocated for a de minimis exemption to simplify transactions, such as buying coffee with cryptocurrency, without incurring capital gains or losses. The revised bill removes the $200 threshold for de minimis exemptions and introduces a deemed basis of $1 for exchanges.
Additionally, the legislation would apply wash sale rules to digital asset transactions and differentiate between 'passive staking' and trading activities. Although the next steps for this bill are uncertain, industry participants expect a strong push to include cryptocurrency in any upcoming tax legislation.