Senator Cynthia Lummis (R-WY) has introduced a sweeping digital asset tax reform bill aimed at modernizing how cryptocurrencies are taxed in the United States, renewing her efforts to ease regulatory burdens on digital asset users.
What Happened: The legislation, unveiled on July 3, proposes to resolve several long-standing tax complications in the crypto sector, including a $300 de minimis exemption for small transactions, more practical tax treatment for mining and staking, and bringing parity between digital assets and traditional financial instruments.
“In order to maintain our competitive edge, we must change our tax code to embrace our digital economy, not burden digital asset users,” Lummis said in a statement.
She described the bill as fully paid for, designed to cut through red tape, and aimed at aligning tax rules with how digital technologies work in practice.
The bill addresses multiple areas that have been problematic for crypto users:
- A de minimis rule would exempt gains from small transactions, up to $300 per transaction and capped at $5,000 annually, easing tax tracking for everyday crypto use such as small purchases.
- Digital asset lending agreements would no longer be treated as taxable events, aligning crypto lending with the well-established securities lending framework.
- A wash sale rule would now apply to digital assets, closing a tax loophole that allowed crypto traders to harvest tax losses in ways not permitted for stock investors.
- The bill also introduces a mark-to-market tax election for digital asset dealers and traders, providing consistent treatment with their securities and commodities counterparts.
- For miners and stakers, income recognition would be deferred until assets are sold, addressing liquidity concerns for those taxed on unrealized gains.
- Additionally, the bill would remove the appraisal requirement for charitable donations of actively traded digital assets, encouraging more philanthropy from crypto holders.
The Congressional Joint Committee on Taxation estimates the proposed reforms would generate about $600 million in net revenue over the 2025-2034 period.
What’s Next: Lummis invited public feedback on the bill, signaling her intention to build bipartisan support as she works to advance the legislation through Congress.
The Wyoming Republican’s new crypto tax proposal closely mirrors the measures she previously attempted to include in a broader legislative package introduced earlier this week.
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