On December 20, bipartisan US lawmakers Reps. Max Miller and Steven Horsford introduced the Digital Asset PARITY Act to reform cryptocurrency taxation. The bill aims to close the wash sale loophole while offering tax relief for staking rewards and small transactions. It seeks to provide clarity and fairness in the evolving digital asset market.
On December 20, Representatives Max Miller and Steven Horsford, in a bipartisan effort, proposed the Digital Asset PARITY Act to modernize US crypto tax rules. The legislation targets key issues in the industry, balancing stricter trading regulations with incentives for broader adoption.
A central provision applies 'wash sale' and 'constructive sale' rules to digital assets, which are currently treated as property. This allows traders to sell at a loss for tax deductions and immediately repurchase the same asset. The bill would require a 30-day wait before repurchasing to claim the loss, aligning crypto with equity market standards and potentially raising billions in federal revenue. As Miller stated, “This bipartisan legislation brings clarity, parity, fairness, and common sense to the taxation of digital assets. It protects consumers making everyday purchases, ensures the rules are clear for innovators and investors, and strengthens compliance so everyone plays by the same rules.”
To offset these changes, the act introduces tax deferrals for miners and validators on staking rewards, allowing postponement for up to five years or until sale. This addresses 'phantom income' from illiquid tokens that burden operations without ready cash for taxes.
For retail users, a 'de minimis' exemption eliminates capital gains taxes on transactions under $200 using stablecoins compliant with the GENIUS Act. Horsford explained, “Today, even the smallest crypto transaction can trigger tax calculation, while other areas of the law lack clarity and invite abuse. Our discussion draft of the Digital Asset PARITY Act takes a targeted approach that provides an even playing field for consumers and businesses alike to benefit from this new form of payment.”
Additionally, the bill tightens charitable giving rules to distinguish liquid assets from speculative tokens, preventing tax avoidance while supporting legitimate philanthropy. If enacted, these measures could reshape crypto trading strategies and encourage everyday use as a payment method.
