Sponsors (4)
The bill modernizes and clarifies many tax rules for digital assets—reducing uncertainty for many taxpayers and firms and simplifying common retail treatments—while imposing new compliance burdens, creating pockets of higher tax exposure, and risking revenue loss or litigation due to complex thresholds and carve-outs.
Many taxpayers and crypto firms get clearer, statutorily grounded definitions and rules across multiple digital-asset topics (staking, exchanges, 'actively traded', constructive sales, validation, charity substantiation), reducing legal uncertainty and aiding compliance planning.
People who passively stake digital assets (not running a trade or business) are generally excluded from being treated as running a trade or business, lowering risk of UBIT or self-employment tax for ordinary holders.
Retail users of regulated payment stablecoins generally will not recognize taxable gain or loss on routine redemptions and get a standardized $1 basis, simplifying recordkeeping and reducing small-dollar tax reporting burdens.
Excluding passive staking from 'trade or business' treatment may shrink tax revenue or create opportunities for taxpayers to design around UBIT/source rules, reducing tax collections or creating loopholes.
Many new definitions rely on numeric or market‑based thresholds and carve-outs that are ambiguous in practice, increasing litigation and IRS-guidance risk and leaving taxpayers and platforms with costly uncertainty.
The Act creates substantial new compliance, reporting, and recordkeeping obligations for custodians, exchanges, brokers, charities, and taxpayers, which will raise administrative costs and may be passed on to users.
Based on analysis of 12 sections of legislative text.
Adds new tax definitions and rules for digital assets, treats passive staking as non-business, creates special stablecoin tax treatment, expands wash-sale/mark-to-market/constructive-sale coverage, and tightens crypto charitable gift rules.
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
Sets new federal tax rules and definitions for digital assets (cryptocurrencies), staking, stablecoins, and exchanges; creates special tax treatment for certain small-value transactions and regulated payment stablecoins; expands existing tax regimes (wash-sale, mark-to-market, constructive sale, loaned-asset rules) to cover digital assets; and tightens valuation and acknowledgment rules for charitable gifts of crypto. Many changes amend the Internal Revenue Code and take effect for taxable years beginning after December 31, 2025, while some procedural or definitional provisions are effective on enactment. The bill also directs Treasury to study low-value consumer digital-asset transactions and issue interim guidance, delegates regulatory and anti‑avoidance rulemaking authority to the Secretary, and inserts a placeholder subchapter for later rules on assets acquired via validation (staking/mining).