Lawmakers from the US have put forward a discussion draft designed to lighten the load of taxes on the everyday users of crypto to a certain extent, one of the features being the exemption of small payments with stablecoins and a new option to postpone the payment of taxes on rewards from staking and mining. This was proposed by Representatives Max Miller and Steven Horsford and would change the US Internal Revenue Code to a great extent in a way more aligned with the actual use of digital assets in daily transactions.
The proposed draft states that crypto users will not be required anymore to report the capital gains or losses on the transactions of stablecoins worth up to $200, as long as the stablecoin is issued by an authorized issuer, is pegged to the US Dollar and is trading in a small range around $1. The intention behind this, the lawmakers said, is to eliminate tax friction caused by low-value routine payments through the use of regulated stablecoins.
Safeguards Included as Proposal Expands to Staking and Trading
The proposal does contain certain provisions that aim to prevent misuse. In case a stablecoin’s price falls outside the specified limits, the concession will not apply and brokers or dealers will be exempted. The Treasury Department would still have the power to enforce anti-abuse measures and reporting requirements.
Besides payments, the proposal also deals with what the lawmakers refer to as “phantom income” from staking and mining. Depending on the draft, taxpayers would be able to select deferral of income recognition on staking or mining rewards for a maximum period of five years instead of getting taxed right away upon receipt. Additionally, the measure extends the securities lending tax treatment to some crypto lending arrangements, applies wash sale rules to digital assets traded actively, and permits traders and dealers to apply mark-to-market accounting to their crypto holdings.
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