Bipartisan Lawmakers Introduce Bill to Rethink Crypto Taxes in US

A bipartisan group of House lawmakers has taken a step towards reevaluating how small digital asset transactions are taxed in the US by introducing the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields Act (PARITY Act).

The bill directs the Treasury Department to examine whether a tax break for small crypto transactions is feasible under current authority and report back within 180 days.

According to Kraken's data, nearly a third of its tax forms covered transactions worth less than $1, highlighting the burden of small crypto transaction taxes. The bill also calls for a study on how much paperwork such transactions generate for taxpayers and the total number of transactions under $200 reported to the IRS each year.

The PARITY Act carries over a section from an earlier draft that would treat regulated payment stablecoins like cash for tax purposes, and it seeks to apply wash sale rules to crypto to close a loophole currently available to traders. The bill aims to modernize the tax code for the digital age and ensure emerging financial tools help expand financial inclusion and pathways to wealth.