US Lawmakers Propose PARITY Act to Overhaul Crypto Tax Regulations
Bipartisan lawmakers introduced the Digital Asset PARITY Act to close the crypto wash sale loophole while offering tax relief on staking and small transactions.Summary
Bipartisan US lawmakers, Reps. Max Miller and Steven Horsford, introduced the Digital Asset PARITY Act to modernize cryptocurrency tax regulations. The bill's most significant change is applying "wash sale" and "constructive sale" rules to digital assets, aligning them with equity market regulations and closing a loophole that previously allowed traders to sell losing positions for tax deductions and immediately repurchase the asset. This change requires a 30-day waiting period to claim a loss.
In exchange for these tighter trading rules, the legislation offers substantial concessions to the crypto industry. It introduces an elective framework allowing miners and validators to defer taxes on staking rewards for up to five years or until the assets are sold, addressing the issue of "phantom income" from illiquid tokens. Furthermore, for retail users, the bill establishes a "de minimis" exemption, eliminating capital gains taxes on transactions under $200 made with stablecoins compliant with the GENIUS Act, thereby encouraging the use of crypto for everyday purchases. The Act also aims to tighten rules on charitable crypto giving by distinguishing between liquid and speculative tokens.
(Source：BeInCrypto)