The House Ways and Means Committee has introduced the Digital Asset Tax Certainty Act, a proposed bill designed to bring additional clarity and relief to cryptocurrency taxpayers in the United States. Chair Jason Smith, a Republican representative from Missouri, led the release of the bill ahead of a scheduled markup session.
Key provisions: $10 de minimis rule and simplified accounting
One of the notable features in the proposed legislation is the establishment of a de minimis exemption for low-value digital asset transactions. Under the act, U.S. taxpayers would not have to report capital gains or losses when using cryptocurrency to pay any qualifying fee or transaction amount of $10 or less. This exception is set to apply both to cryptocurrencies generally and U.S. dollar stablecoins, even if the stablecoin slightly deviates from its $1 target price.
The de minimis relief aims to address the obstacles posed by current Internal Revenue Service rules, which require every transaction, regardless of size, to be reported for tax purposes. In addition, the act would allow certain users to opt for an annual accounting method for traded digital assets, giving them the option to report overall gains and losses once per year instead of tracking every small transaction separately. This provision is set to take effect in 2028 and is intended to streamline cryptocurrency tax compliance for individuals and businesses alike.
Proponents of the act believe that exempting small transactions and allowing for simplified annual accounting will make it easier for taxpayers to comply with federal rules governing digital asset activity.
Mining, staking, and wash-sale regulations included
The Digital Asset Tax Certainty Act also clarifies the tax treatment of income from mining and staking activities. According to the bill, proceeds earned through mining or staking will generally be considered ordinary income for taxation purposes. Income recognition deferral for newly created digital assets, a provision supported by some industry groups, is not included in the current version of the bill.
The legislation would allow investment trusts to engage in staking activities without jeopardizing their tax classification. Additionally, the bill expands the existing wash-sale rules—currently applied to stocks and securities—to digital assets. Taxpayers would not be able to claim a loss deduction on a digital asset if they purchase the same or a substantially identical asset within 30 days before or after the sale.
Some lending and anti-abuse provisions are also included, ensuring that digital asset transfers under certain qualifying lending agreements are not classified as sales or exchanges. These components are designed to further clarify the federal stance on evolving digital asset activities.
Mini dictionary: Wash-sale rule — A regulation that prevents taxpayers from claiming a tax deduction for a loss on a security if they acquire a substantially identical security within 30 days before or after the sale. The aim is to prevent investors from creating artificial losses for tax benefits while maintaining their investment positions.
| Aspect | Previous Rule | Proposed Rule |
|---|---|---|
| De minimis exemption | No exemption | $10 or less transaction exemption |
| Accounting method | Transaction-by-transaction | Annual simplified reporting |
| Wash-sale rule | Not applied to crypto | Extended to digital assets |
| Mining/staking income | Varies | Treated as ordinary income |
Voluntary disclosure program and next steps
Another key component of the proposal is the directive for the Treasury Department to establish a Digital Asset Voluntary Disclosure Program within 12 months of the act’s enactment. This initiative would give eligible taxpayers the opportunity to amend previous tax returns and pay any outstanding taxes, interest, and penalties for past digital asset transactions.
The House Ways and Means Committee is scheduled to discuss and potentially amend the bill during a markup session on Wednesday at 10 a.m. Eastern Time. If the committee approves the legislation, it may advance to consideration by the full House of Representatives for further debate.
The committee’s legislative process will determine the final terms and reach of the Digital Asset Tax Certainty Act before it moves forward in Congress.
