What to know:
- Crypto tax drafts cover DeFi lending, stablecoin payments, staking, and mining rules.
- House panel will review seven digital asset tax proposals at its June 9 hearing.
- Lawmakers also weigh wash-sale rules, reporting issues, and staking tax guidance.
Crypto tax policy moved higher on the U.S. legislative agenda after the House Ways and Means Committee released seven discussion drafts before a June 9 hearing, covering DeFi lending, stablecoin payments, staking rewards, mining, reporting, and other digital asset issues.
According to crypto journalist Eleanor Terrett, the package separates major policy areas into standalone proposals. The drafts include proposals addressing stablecoins, mining, staking, DeFi lending, wash-sale rules, charitable giving, and voluntary disclosure.
The crypto tax proposals also cover taxpayers who have outstanding reporting issues related to digital assets.
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Crypto Tax Proposals Focus on DeFi and Payment Rules
The proposals come as lawmakers consider the role digital assets should play in the U.S. tax code. Earlier, several topics were tied to larger bills, such as the bipartisan PARITY Act. Senator Cynthia Lummis also introduced a related bill on taxing digital assets.
Among the most closely watched components of the package is DeFi lending. The crypto tax drafts also have a feature on lending activity in decentralized finance, said Terrett. For years, the sector has been in limbo about how to tax transactions.
Another significant aspect of the discussion package is the topic of stablecoin payments. One proposal would give compliant stablecoins de minimis treatment for small gains and losses. That shift may also help to distinguish between low-priced transactions and risky crypto speculation.
The stablecoin measure follows ideas raised in the PARITY Act. The bill would contain a deemed-basis rule for regulated, dollar-pegged payment stablecoins, according to Representative Steven Horsford’s office.
The intent was to make qualifying digital dollars easier to move around like cash in order to make the payments.
Lawmakers Review Anti-Abuse Rules for Crypto Tax
In addition, anti-abuse regulations for digital asset transactions are included in the package. Terrett stated lawmakers are looking at wash-sale and constructive-sale rules in crypto. These regulations would approve the crypto tax regime and bring it nearer to conventional market standards.
Mining and staking rewards continue to be a key component of the review. The drafts account for both activities as well as rules for charitable contributions and reporting, Terrett said. Legislators have considered giving taxpayers a choice on when rewards are taxable.
The PARITY Act introduced by Representatives Horsford, Max Miller, Suzan DelBene, and Mike Carey included such an election. The measure was intended to deal with the issue of phantom income, Horsford’s office said.
Those concerns can come into play when participants have a tax debt before they are able to cash in the rewards.
Congress has also been pushing the Internal Revenue Service for staking guidance. Earlier reports said 18 bipartisan lawmakers urged the agency to revisit its 2023 position before the 2026 tax year. Such a request contributed to the pressure for crypto tax clarity.
The focus now is on the June 9 House Ways and Means Committee hearing. The discussion drafts are likely to be a major part of the proceedings, said Terrett. As the crypto tax rules are still pending, lawmakers will consider potential adjustments.
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