Sponsors (4)
Official title: To amend the Internal Revenue Code of 1986 to provide for the tax treatment of digital assets.
Introduced May 19, 2026 by Max Miller · Last progress May 19, 2026
The bill provides broad statutory clarity and retail relief for many crypto activities—reducing uncertainty for taxpayers and market participants—but shifts costs onto platforms, increases compliance and audit risk for active traders, and leaves significant implementation and definitional questions to future Treasury/IRS rulemaking.
Most taxpayers and crypto businesses get far clearer, statutory tax rules across a wide range of crypto activities (staking, exchanges, lending/borrowing, forks/airdrops, mark‑to‑market eligibility, constructive sales, validation and charitable gifts), reducing legal uncertainty and improving compliance predictability.
Retail users of regulated payment stablecoins generally won’t recognize taxable gain/loss on routine redemptions within the 1% band, and exchanges will use a standardized $1 basis for these coins, simplifying recordkeeping and reducing tax paperwork for everyday transactions.
People who passively stake newly issued digital assets (passive stakers) are not treated as running a trade or business, lowering risk of UBIT or self-employment tax for many holders and enabling investment trusts to use trustee staking/liquidity tools without losing investment-trust status.
Custodial platforms, brokers, and exchanges will face substantial new reporting, tracking and administrative burdens (definitions tying custody to 'digital asset exchange', substitute‑payment tracking, basis adjustments, wash‑sale and mark‑to‑market compliance), raising compliance costs that are likely passed to users.
Many taxpayers and businesses will face implementation uncertainty and planning risk because substantive rules are deferred to Treasury/IRS rulemaking and some effective dates are delayed, leaving taxpayers unclear about current treatment until regulations are finalized.
Traders, dealers and some active market participants may see higher or earlier taxable income because of sourcing rules, constructive‑sale application, wash‑sale extension, and mark‑to‑market elections, increasing tax bills or altering trading economics for professional and active retail traders.
Based on analysis of 12 sections of legislative text.
Rewrites parts of the tax code to define and tax digital assets, carve out passive staking, create a narrow stablecoin non-recognition rule, expand wash-sale/constructive-sale rules, add mark-to-market elections, and tighten crypto-donation rules.
Changes the federal tax code to create new definitions and tax rules for digital assets, including stablecoins, staking, mining, trading, lending, wash sales, constructive sales, mark-to-market elections, and charitable donations of crypto. It clarifies when staking is treated as passive (not a trade or business), creates a narrow no-gain/no-loss rule for certain regulated payment stablecoins, expands wash-sale and constructive-sale rules to cover digital assets, allows mark-to-market treatment for dealers in actively-traded digital assets, and adds reporting, valuation, and penalty rules for donated digital assets. The bill also directs Treasury to study small-value consumer crypto transactions, requires regulatory guidance and anti-abuse rules, inserts a placeholder subchapter for validation-derived assets, and phases many changes into taxable years beginning after December 31, 2025 (with some rules effective on enactment).