Digital Asset PARITY Act

Key Points

• The bill eliminates tax reporting for most stablecoin transactions. If you buy a regulated stablecoin near $1 and sell it near $1, you won't owe any taxes on the tiny price difference. This makes stablecoins work more like cash in your wallet instead of an investment you have to track.
• The bill closes a major tax loophole by applying wash sale rules to crypto. Right now, crypto investors can sell at a loss to reduce their tax bill and immediately buy back the same coin. This bill would ban that strategy, treating crypto the same way the tax code already treats stocks and bonds.
• Crypto miners and stakers get a new option: they can choose to defer taxes on newly earned coins until they actually sell them. Without this election, the default rule would tax them on the fair market value the moment they receive the coins. The deferral election lasts five years.
• Donating popular cryptocurrencies to charity gets easier. For actively traded digital assets, the bill removes the requirement for a costly professional appraisal. Less common coins need detailed acknowledgment from the charity, and the deduction is capped at whatever the charity actually receives when selling the asset.
• The Treasury Department must study whether small crypto purchases should be tax-free and issue interim guidance within 180 days. Congress says people shouldn't face heavy paperwork burdens for buying a cup of coffee with crypto, but the bill does not actually create a tax exemption for small transactions yet.
• Foreign investors trading digital assets in the U.S. through brokers or on their own get a safe harbor from U.S. taxes, similar to existing rules for stocks and commodities. This aims to keep the U.S. competitive as a hub for crypto trading.