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On December 20, two bipartisan US representatives introduced new cryptocurrency tax legislation to modernize the nascent industry. The bill, called the Digital Asset Equality Act, was sponsored by Representatives Max Miller and Stephen Horsford.
The legislation proposes to close the industry’s most profitable “wash sale” loophole in exchange for significant tax relief on scalping bonuses and daily payouts.
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Key provisions of the Digital Assets Equality Act
The most important financial provision in the bill is the application of the “wash sale” and “constructive sale” rules. On the digital axis.
Under the current regulation, Digital assets are treated as propertywhich allows traders to sell a losing position to claim a tax deduction and immediately buy the same asset.
through Alignment of digital currencies with stock exchange rules The legislation closes a loophole that authorities previously estimated could increase billions in federal revenue.
If passed, the rule would require traders to wait 30 days before recovering an asset to claim the loss. This delay forces a radical rethinking of portfolio management strategies during a period of market decline.
“This bipartisan legislation brings clarity, fairness, equity and common sense to the taxation of digital assets. It protects consumers who make purchases every day, ensures the rules are clear for innovators and investors, and promotes compliance so everyone plays by the same rules.” He said Miller.
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Submission of a “de minimis” exemption.
To compensate for the stricter trading rules, the legislation makes a major concession to the supply side of the cryptocurrency economy.
The law creates an optional framework that allows workers and auditors to return tax on… Storage bonus Up to 5 years or until they sell the asset.
This addresses the long-standing complaint in the industry about “phantom income.” The problem arises when validators receive rewards in illiquid tokens that they cannot easily sell to cover tax liabilities.
By moving the taxable event to the point of sale rather than receipt, the invoice eliminates a significant cash burden on Mining and storage operations in the United States.
For retail users, the law provides “minimum” exception. Designed to normalize the use of the digital dollar.
The proposal would eliminate capital gains tax on transactions worth less than $200 when users transact with stablecoins issued by compliant companies. With the recent GENIUS act.
This clause ensures that spending cryptocurrency on daily purchases does not trigger a capital gain calculation for each transaction. This removes a long-standing point of friction that has prevented the use of cryptocurrencies as a viable business medium.
“Today, even the smallest cryptocurrency transactions can raise tax calculations, while other areas of the law lack clarity and invite abuse.” Horsford explained: “The debate draft of the Digital Assets Equality Act takes a targeted approach that provides equal opportunities for consumers and businesses to benefit from this new form of payment.”
The proposal also tightens the rules for charitable donations by distinguishing between liquid assets and speculative tokens to prevent valuation abuse. The change aims to ensure that the tax code supports legitimate charitable donations without becoming a means of tax evasion.
