U.S. legislators have announced a bipartisan initiative to modernize federal tax codes treatment of digital assets. The effort focuses on stablecoins and everyday transactions as well as staking rewards, mining rewards, and staking.
Max Miller (R – OH) and Steven Horsford released a draft Digital Asset PARITY Act. The act aims to clarify and simplify tax regulations for dollar-pegged, regulated stablecoins, and eliminate unnecessary reporting burdens on routine crypto payment. It also ensures that daily transfers will not trigger reporting of capital gains for transactions below a certain amount.
This proposal also aims to clarify the source of income from trading digital assets and to extend existing tax principles on securities lending to digital asset loans that qualify, thus bringing virtual currencies into line with current financial rules.
The framework will also allow for flexibility when it comes to recognizing the income generated from mining and staking rewards. This is done by allowing deferral of income under certain conditions.
Says Congressman Miller,
The tax code of the United States has not kept pace with financial technology. The bipartisan bill brings parity, justice, clarity and common sense into the taxation digital assets. This legislation protects everyday consumers, clarifies the rules for investors and innovators, and ensures that everyone is playing by the same set of rules .”
They also propose applying wash-sale or constructive-sale to digital assets in order to stop abusive tax-shielding strategies. And they modernize charitable deduction rules that apply to highly liquid digital asset. This is part of a larger push for aligning crypto taxation to traditional financial systems, and reducing ambiguity within the Internal Revenue Code.
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The post US Congressmen Announce Bipartisan Move to ‘Modernize” Stablecoin Tax Code will be updated as new information becomes available.
