New Legislative Push for Cryptocurrency Tax Reform
Last month, Representatives Stephen Horsford (D-Nevada) and Max Miller (R-Ohio) brought back the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yield (PARITY) Act. This legislation aims to update how the United States deals with cryptocurrencies and taxes related to them.
As Congress gears up to discuss taxes generally in the coming months, cryptocurrencies are likely to enter the conversation. This is particularly crucial for U.S. cryptocurrency owners, given the current requirement to report their digital asset holdings and transactions.
The PARITY Act initially came out as a discussion draft in December. Then, it was re-released on March 26 for further input and consideration.
One of the most noticeable changes involves a section focused on “minimal” gains. These small exemptions generally allow certain minor transactions to be excluded from tax returns. With these exemptions in place, individuals wouldn’t need to report small transactions or worry about tax implications on them.
The industry has long advocated for such minimal exemptions for limited transactions, aiming to simplify everyday purchases—like coffee—without the hassle of reporting capital gains or losses from the virtual currency used. In the December 2025 draft, the law introduced a minimum exemption of $200 for payments made via “regulated payment stablecoins.”
However, it seems these exemptions do not extend to other digital assets like Bitcoin. In the memo, it clarified the focus on stablecoins in light of the GENIUS Act.
While the March 2026 version didn’t explicitly demand a minimum exemption, some parts appeared to address related concerns.
According to the bill, “In the case of a sale of a regulated payments stablecoin, no gain or loss on the sale will be recognized unless the taxpayer’s basis in the stablecoin is less than 99 percent of the redemption value of the stablecoin.” This change eliminated the $200 threshold, establishing a $1 standard for exchanges separate from stablecoin sales.
The latest draft also seeks to apply wash sale rules to digital asset transactions—a fairly non-controversial stance. For instance, Senator Cynthia Lummis (R-Wyo.) included a similar provision in her tax proposal last year.
Additionally, the bill distinguishes between “passive staking” and more active trading activities.
What happens next with this bill remains uncertain. There’s been talk of a reconciliation tax bill, and even though U.S. President Donald Trump has rolled out his budget request for fiscal year 2027, it’s unclear if the reconciliation bill will materialize or if it will incorporate cryptocurrencies.
Still, discussions with industry stakeholders over the past weeks indicate a strong desire to bring cryptocurrencies into any future tax legislation that may be on the table.
