Key takeaways
- Lawmakers propose exempting capital gains tax on stablecoin transactions below $200.
- The draft framework would defer taxes on staking and mining rewards for up to five years.
According to Bloomberg, a bipartisan plan comprised of two House members seeks to overhaul key aspects of cryptocurrency taxation by introducing a safe harbor for small stablecoin transactions and proposing a compromise approach to taxing rewards from blockchain validation activities.
The framework, developed by Reps. Max Miller and Steven Horsford, proposes exempting regulated, dollar-pegged stablecoin transactions below $200 from capital gains tax, while leaving other crypto transactions subject to existing rules.
The framework also aims to resolve a long-standing dispute over the taxation of staking and mining rewards. This would give taxpayers the opportunity to defer taxes on these awards for up to five years. At the end of this period, the rewards would be taxed as income based on their fair market value.
The proposal would also subject digital assets to securities tax rules, allow eligible traders to use mark-to-market accounting, and extend wash sale restrictions to crypto assets.
