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 update the US approach to crypto and taxes. As Congress prepares to address tax reforms in the coming months, the crypto industry may be impacted, making it crucial for US-based crypto owners to understand the potential changes.
The revised bill, initially released in December and re-released on March 26, introduces notable changes, including the section on 'de minimis' gains. De minimis exemptions allow for small transactions to be exempt from tax reporting, and the industry has long advocated for such exemptions to facilitate everyday transactions like buying coffee with crypto without incurring tax burdens.
The latest version of the PARITY Act removes the $200 threshold for de minimis exemptions and instead proposes 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. Although the next steps for the bill are uncertain, industry insiders anticipate a strong push to include crypto in any upcoming tax legislation.