On December 20, U.S. Representatives Max Miller (R-OH) and Steven Horsford (D-NV) released a bipartisan discussion draft of the Digital Asset PARITY Act. The proposal aims to modernize how digital assets are treated under the federal tax code, addressing gaps that have emerged as cryptocurrencies, stablecoins, and staking have become more widely used.
According to the lawmakers, the bill is designed to provide clearer rules for taxpayers and businesses while strengthening compliance and aligning crypto taxation more closely with existing financial market standards.
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Exemption for Small Stablecoin Payments
One of the central provisions of the draft legislation is a $200 de minimis exemption for transactions made with regulated, U.S. dollar–pegged stablecoins. If enacted, qualifying transactions below that threshold would not trigger capital gains taxes.
The exemption is limited in scope. It would apply only to stablecoins issued by permitted entities under the GENIUS Act and would exclude other digital assets. The goal is to reduce the administrative burden associated with tracking gains and losses on small, everyday payments.
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Changes to Staking and Mining Taxes
The bill also addresses how staking and mining rewards are taxed. Under the proposal, taxpayers could elect to defer taxation on rewards for up to five years or until the assets are sold. After the deferral period, rewards would be taxed as ordinary income based on their fair market value.
This approach represents a middle ground between immediate taxation upon receipt and full deferral until disposition, aiming to address concerns around liquidity and unrealized income without eliminating taxation altogether.
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Applying Traditional Market Rules to Crypto
To strengthen enforcement, the PARITY Act would extend several existing securities tax rules to digital assets. These include wash sale and constructive sale rules, which are intended to prevent artificial loss harvesting and deferral of gains.
The draft also allows eligible traders and dealers to use mark-to-market accounting and extends securities lending tax treatment to certain digital asset loans. Additional provisions update rules for charitable donations of digital assets by distinguishing between liquid and illiquid tokens.
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Status and Next Steps
The PARITY Act is currently a discussion draft and has not yet been introduced as formal legislation. If advanced and passed, most provisions would apply to taxable years beginning after December 31, 2025. While the proposal does not guarantee passage, its bipartisan sponsorship signals continued congressional focus on establishing clearer tax rules for digital assets.
