H.R. 8899

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8899 Introduced in House (IH)]

<DOC>

119th CONGRESS
2d Session
H. R. 8899

To amend the Internal Revenue Code of 1986 to provide for the tax 
treatment of digital assets.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

May 19, 2026

Mr. Miller of Ohio (for himself, Mr. Horsford, Mr. Carey, and Ms. 
DelBene) introduced the following bill; which was referred to the 
Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to provide for the tax 
treatment of digital assets.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Digital Asset Protection, 
Accountability, Regulation, Innovation, Taxation, and Yields Act'' or 
the ``Digital Asset PARITY Act''.

SEC. 2. TAX TREATMENT OF REGULATED PAYMENT STABLECOIN TRANSACTIONS.

(a) In General.--Part III of subchapter O of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
1045 the following new section:

``SEC. 1046. REGULATED PAYMENT STABLECOIN TRANSACTIONS.

``(a) Sale of Regulated Payment Stablecoin.--
``(1) In general.--In the case of any sale or exchange of a 
regulated payment stablecoin, no gain or loss shall be 
recognized on such sale or exchange unless the taxpayer's basis 
in such stablecoin is less than 99 percent of the redemption 
value of such stablecoin.
``(2) Redemption value.--For purposes of this subsection, 
the term `redemption value' means the dollar amount for which 
the issuer is obligated to redeem such stablecoin.
``(b) Exchange of Regulated Payment Stablecoin.--In the case of any 
exchange of a regulated payment stablecoin, the acquirer's basis in 
such stablecoin shall be deemed to be $1.
``(c) Transaction Costs Not Included in Basis.--Amounts paid or 
incurred to facilitate the sale or exchange of a regulated payment 
stablecoin shall not be included in the calculation of the basis of 
such stablecoin.
``(d) Regulated Payment Stablecoin.--
``(1) In general.--For purposes of this section, the term 
`regulated payment stablecoin' means a digital asset--
``(A) that is a payment stablecoin issued by a 
permitted payment stablecoin issuer,
``(B) with respect to which the issuer is obligated 
to convert, redeem, or repurchase the payment 
stablecoin for a fixed amount of United States dollars, 
and
``(C) which was acquired by the taxpayer for a 
price within 1 percent of $1.00.
``(2) Definitions.--The terms `payment stablecoin' and 
`permitted payment stablecoin issuer' have the meaning given 
those terms, respectively, in section 2 of the GENIUS Act (12 
U.S.C. 5901).
``(e) Dealers and Traders.--This section shall not apply to the 
sale or exchange of any regulated payment stablecoin by a taxpayer who 
is a dealer or trader in securities or commodities.
``(f) Regulations and Guidance.--The Secretary shall prescribe such 
regulations or other guidance as may be necessary or appropriate to 
carry out this section, including to prevent the avoidance of tax under 
this section.''.
(b) Clerical Amendment.--The table of sections for part III of 
subchapter O of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after the item relating to section 1045 the 
following new item:

``Sec. 1046. Regulated payment stablecoin transactions.''.
(c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2025.

SEC. 3. DIGITAL ASSET TRADING SAFE HARBOR.

(a) In General.--Paragraph (2) of section 864(b) of the Internal 
Revenue Code of 1986 is amended by redesignating subparagraph (C) as 
subparagraph (D) and by inserting after subparagraph (B) the following 
new subparagraph:
``(C) Traded digital assets.--
``(i) In general.--Trading in traded 
digital assets through a resident broker, 
commission agent, custodian, or other 
independent agent.
``(ii) Trading for taxpayer's own 
account.--Trading in traded digital assets for 
the taxpayer's own account, whether by the 
taxpayer or the taxpayer's employees or through 
a resident broker, commission agent, custodian, 
digital asset exchange, or other agent, and 
whether or not any such employee or agent has 
discretionary authority to make decisions in 
effecting the transactions. This clause shall 
not apply in the case of a dealer in digital 
assets.
``(iii) Limitation.--This subparagraph 
shall apply only if the digital assets are of a 
kind customarily dealt in on a digital asset 
exchange.''.
(b) Conforming Amendment.--Subparagraph (D) of section 864(b)(2) of 
the Internal Revenue Code of 1986, as redesignated by subsection (a), 
is amended by striking ``(A)(i) and (B)(i)'' and inserting ``(A)(i), 
(B)(i), and (C)(i)''.
(c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of enactment of this 
Act.

SEC. 4. TAX TREATMENT OF DIGITAL ASSET LENDING AGREEMENTS AND RELATED 
MATTERS.

(a) In General.--Subsection (a) of section 1058 of the Internal 
Revenue Code of 1986 is amended by inserting ``, or eligible digital 
assets'' after ``(as defined in section 1236(c))''.
(b) Basis.--Subsection (c) of section 1058 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following: ``In the 
case of a basis adjustment to securities or eligible digital assets 
with respect to which an agreement is in place which meets the 
requirements of subsection (b), such adjustment shall be made by 
factoring in the return to the transferor of securities identical to 
the securities transferred.''.
(c) Substitute Payments.--Section 1058 of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new subsection:
``(d) Substitute Payments.--Any payment made to a lender pursuant 
to an agreement described in subsection (b) in lieu of staking rewards, 
transaction fees, protocol distributions, or other amounts that would 
otherwise be payable with respect to a lent digital asset shall be 
included in the gross income of the lender in the same manner as if 
such amounts had been received directly by the lender.''.
(d) Rule of Construction.--Nothing in this section, or any 
amendments made by this section, shall be construed to create any 
inference with respect to the classification of any digital asset as a 
security under the Securities Act of 1933 (15 U.S.C. 77a et seq.) or 
the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
(e) Rulemaking Authority.--The Secretary of the Treasury (or the 
Secretary's delegate) may adopt rules to implement the amendments made 
by this section, including the application of the amendments made by 
this section to forks, airdrops, and similar subsidiary value.
(f) Effective Date.--The amendments made by this section shall 
apply to exchanges in taxable years beginning after the date of 
enactment of this Act.

SEC. 5. APPLICATION OF WASH SALE RULES TO DIGITAL ASSETS.

(a) In General.--Section 1091 of the Internal Revenue Code of 1986 
is amended--
(1) by striking ``stock or securities'' each place it 
appears and inserting ``specified assets'', and
(2) by striking ``shares of'' each place it appears.
(b) Specified Asset.--Section 1091 of such Code is amended by 
adding at the end the following new subsections:
``(g) Specified Asset.--For purposes of this section--
``(1) In general.--The term `specified asset' means--
``(A) any stock or security, and
``(B) any digital asset.
``(2) Contracts and options.--Except as otherwise provided 
in regulations, the term `specified asset' shall include any 
contract or option to acquire or sell any specified asset 
described in paragraph (1).
``(h) Treatment of Certain Assets as Substantially Identical.--
``(1) In general.--For purposes of determining whether an 
asset is substantially identical to any digital asset under 
this section, except to the extent provided by regulations 
prescribed by the Secretary--
``(A) the determination of whether an asset is 
substantially identical to any other asset shall be 
made on the basis of the economic exposure of the 
asset,
``(B) the mere fact that an asset may have 
different or no voting rights shall not prevent the 
asset from being substantially identical to any other 
asset,
``(C) the mere fact that an asset may trade on a 
different exchange (or no exchange) or a different 
blockchain (or no blockchain) shall not be taken into 
account, and
``(D) any asset that would not otherwise be treated 
as substantially identical to another asset shall not 
be so treated merely because the asset is based on the 
same or substantially similar protocol or computer 
code.
``(2) No inference.--Nothing in this subsection shall 
create any inference as to whether any property is 
substantially identical to any property that is not a digital 
asset or as to whether any property was substantially identical 
to any digital asset before the effective date of this 
subsection.''.
(c) Conforming Amendments.--
(1) Sections 312(f)(1), 1256(f)(5), and 6045(g)(2)(B)(ii) 
are each amended by striking ``stock or securities'' and 
inserting ``specified assets''.
(2) Section 1091(a) is amended by striking the last 
sentence.
(3) Section 1091(e) (as amended by subsection (a)) is 
amended to read as follows:
``(e) Certain Short Sales of Specified Assets and Specified Asset 
Futures Contracts To Sell.--Rules similar to the rules of subsection 
(a) shall apply to any loss realized on the closing of a short sale of 
(or the sale, exchange, or termination of a specified asset futures 
contract to sell) specified assets if, within a period beginning 30 
days before the date of such closing and ending 30 days after such 
date--
``(1) substantially identical specified assets were sold, 
or
``(2) another short sale of (or specified asset futures 
contracts to sell) substantially identical specified assets was 
entered into.
For purposes of this subsection, the term `specified asset futures 
contract' has the meaning provided by section 1234B(c).''.
(4) The heading of section 1091 is amended by striking 
``stock or securities'' and inserting ``specified assets''.
(5) The headings of subsections (b), (c), and (d) of 
section 1091 are each amended by striking ``Stock'' each place 
it appears and inserting ``Specified Assets''.
(6) The item relating to section 1091 in the table of 
sections for part VII of subchapter O of chapter 1 is amended 
by striking ``stock or securities'' and inserting ``specified 
assets''.
(d) Effective Date.--The amendments made by this section shall 
apply to sales, dispositions, and terminations after the date of 
enactment of this Act.

SEC. 6. MARK-TO-MARKET ELECTION.

(a) In General.--Section 475 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (g) as subsection (h) and by 
inserting after subsection (f) the following new subsection:
``(g) Election of Mark To Market for Dealers and Traders in 
Actively-Traded Digital Assets.--
``(1) Dealer in digital assets.--In the case of a dealer in 
actively-traded digital assets who elects the application of 
this subsection, this section shall apply to digital assets 
held by such dealer in the same manner as this section applies 
to securities held by a dealer in securities.
``(2) Trader in digital assets.--In the case of a person 
who is engaged in a trade or business as a trader in actively 
traded digital assets, and who elects to have this paragraph 
apply to such trade or business as a trader in actively traded 
digital assets, subsection (f)(1) shall apply to digital assets 
held by the trader in connection with such trade or business in 
the same manner as such subsection applies to securities held 
by a trader in securities.
``(3) Limitation.--An election under this section shall 
only apply to digital assets treated as actively traded (as 
defined by the Secretary).
``(4) Regulations and guidance.--The Secretary shall issue 
such regulations and guidance as are necessary to carry out the 
provisions of this subsection.''.
(b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of enactment of this Act.

SEC. 7. APPLICATION OF CONSTRUCTIVE SALE RULES TO DIGITAL ASSETS.

(a) In General.--Section 1259 is amended by inserting ``digital 
asset,'' after ``debt instrument,'' each place it appears.
(b) Effective Date.--The amendment made by this section shall apply 
to constructive sales after the date of enactment of this Act.

SEC. 8. TREATMENT OF DIGITAL ASSETS ACQUIRED THROUGH VALIDATION 
ACTIVITIES.

(a) In General.--Chapter 1 is amended by inserting after subchapter 
V the following new subchapter:

``Subchapter W--Digital Assets Acquired Through Validation Activities

``Sec. 1400W-1. Inclusion in gross income; expenses not capitalized.
``Sec. 1400W-2. Election to defer inclusion of income and capitalize 
expenses.
``Sec. 1400W-3. Definitions.

``SEC. 1400W-1. INCLUSION IN GROSS INCOME; EXPENSES NOT CAPITALIZED.

``In the case of the acquisition of any newly created digital asset 
by a taxpayer which is a specified taxpayer during any taxable year--
``(1) the fair market value of such asset shall be included 
in such taxpayer's gross income as ordinary income for such 
taxable year, and
``(2) the taxpayer's basis in such asset shall be increased 
by the amount included in gross income under paragraph (1).

``SEC. 1400W-2. ELECTION TO DEFER INCLUSION OF INCOME AND CAPITALIZE 
EXPENSES.

``(a) In General.--In the case of a taxpayer which is a specified 
taxpayer for any taxable year to which an election under subsection (c) 
applies--
``(1) any newly created digital asset acquired by such 
taxpayer during such taxable year shall not be included in the 
taxpayer's gross income,
``(2) specified transaction costs paid or incurred during 
such taxable year shall be chargeable to capital account and no 
deduction shall otherwise be allowed under this subtitle with 
respect to such costs, and
``(3) section 1400W-1 shall not apply.
``(b) Gain and Loss on Disposition During Election Period Treated 
as Ordinary.--In the case of the disposition of any newly created 
digital asset to which subsection (a)(1) applies--
``(1) the excess (if any) of--
``(A) the amount realized (in the case of a sale or 
exchange) or the fair market value of such asset (in 
the case of any other disposition), over
``(B) the adjusted basis of such asset,
shall be treated as gain which is ordinary income (and 
such gain shall be recognized notwithstanding any other 
provision of this subtitle), and
``(2) the excess (if any) of the amount described in 
paragraph (1)(B) over the amount described in paragraph (1)(A) 
shall be treated as loss which is ordinary loss.
``(c) Election.--
``(1) In general.--An election under this section shall 
apply for the taxable year for which made and each of the four 
successive taxable years thereafter unless revoked by the 
taxpayer. Such election shall be made at such time and in such 
manner as the Secretary may provide.
``(2) Application to partnerships and s corporations.--In 
the case of any partnership or S corporation, the election 
under this section shall be made at the partnership or S 
corporation level.
``(d) Gains and Losses on Disposition After Election Period.--In 
the case of the sale, exchange, or other disposition of a digital asset 
with respect to which an election was in effect under subsection (b) 
for a prior taxable year, gains and losses with respect to such asset 
shall be treated as long-term capital gains or long-term capital 
losses, as the case may be.

``SEC. 1400W-3. DEFINITIONS.

``For purposes of this subchapter--
``(1) Newly created digital asset.--The term `newly created 
digital asset' means any digital asset--
``(A) not previously owned by any person other than 
the validator, and
``(B) that is issued in connection with the 
validation of digital asset transactions.
``(2) Specified taxpayer.--The term `specified taxpayer' 
means, with respect to the acquisition of any newly created 
digital asset that is issued in connection with the validation 
of digital asset transactions, a taxpayer who is the person who 
validated the digital asset transactions in connection with 
which such digital asset was issued.
``(3) Specified transaction costs.--The term `specified 
transaction costs' means any amount paid or incurred in 
validating any digital asset transaction if, at the time such 
amount is paid or incurred there is a reasonable possibility 
that the taxpayer will acquire a newly created digital asset in 
connection with such validation, including amounts to--
``(A) claim or withdraw such asset from a staking 
pool, validator, or protocol,
``(B) execute a smart contract function to receive 
such asset, or
``(C) transfer such asset to a wallet or account 
controlled by the taxpayer.''.
(b) Clerical Amendment.--The table of subchapters for chapter 1 is 
amended by inserting after the item relating to subchapter V the 
following new item:

``subchapter w--digital assets acquired through validation 
activities''.

(c) Effective Date.--The amendments made by this section shall 
apply to assets acquired in taxable years beginning after December 31, 
2025.

SEC. 9. CHARITABLE CONTRIBUTIONS AND QUALIFIED APPRAISALS.

(a) In General.--Section 170(f)(11)(A)(ii)(I) of the Internal 
Revenue Code of 1986 is amended by inserting ``actively traded digital 
assets,'' before ``and any qualified vehicle''.
(b) Clarification of Application to Qualified Appraisals.--Section 
170(f)(11)(B) of such Code is amended by adding at the end the 
following sentence: ``The requirements of this subparagraph shall not 
apply to contributions of actively traded digital assets.''
(c) Substantiation and Valuation Requirements.--Section 170(f) of 
such Code is amended by adding at the end the following new paragraph:
``(20) Infrequently traded digital assets.--
``(A) In general.--In the case of a contribution of 
a digital asset which is not an actively traded digital 
asset the claimed value of which exceeds $500--
``(i) paragraph (8) shall not apply and no 
deduction shall be allowed under subsection (a) 
for such contribution unless the taxpayer 
substantiates the contribution by a 
contemporaneous written acknowledgment of the 
contribution by the donee organization that 
meets the requirements of subparagraph (B) and 
includes the acknowledgment with the taxpayer's 
return of tax which includes the deduction, and
``(ii) if the organization sells such 
asset, the amount of the deduction allowed 
under subsection (a) shall not exceed the gross 
proceeds received from such sale.
``(B) Content of acknowledgment.--An acknowledgment 
meets the requirements of this subparagraph if it 
includes the following information:
``(i) The name and taxpayer identification 
number of the donor.
``(ii) Details of the transfer of the 
digital asset contribution, including--
``(I) specific addresses involved 
in the contribution,
``(II) a description of the digital 
asset contributed, and
``(III) the date of the 
contribution.
``(iii) A certification that the digital 
asset was sold in an arm's length transaction 
between unrelated parties.
``(iv) The amount of gross proceeds from 
the sale described in clause (iii).
``(v) A statement that the deductible 
amount may not exceed the amount the gross 
proceeds described in clause (iv).
``(vi) Whether the donee organization 
provided any goods or services in 
consideration, in whole or in part, for the 
digital asset.
``(vii) A description and good faith 
estimate of the value of any goods or services 
referred to in clause (vi), or if such goods or 
services consist solely of intangible religious 
benefits (as defined in 170(f)(8)(B)), a 
statement to that effect.
``(C) Contemporaneous acknowledgement; information 
to secretary.--Rules similar to the rules of 
subparagraphs (C)(i) and (D) of paragraph (12) shall 
apply.''.
(d) Penalty for Fraudulent Acknowledgment.--
(1) In general.--Part I of subchapter B of chapter 68 of 
the Internal Revenue Code of 1986 is amended by adding at the 
end the following new section:

``SEC. 6720D. FRAUDULENT ACKNOWLEDGMENTS WITH RESPECT TO DONATIONS OF 
DIGITAL ASSETS.

``(a) In General.--Any donee organization required under section 
170(f)(20)(A) to furnish a contemporaneous written acknowledgment to a 
donor which knowingly furnishes a false or fraudulent acknowledgment, 
or which knowingly fails to furnish such acknowledgment in the manner, 
at the time, and showing the information required under section 
170(f)(20), or regulations prescribed thereunder, shall for each such 
act, or for each such failure, be subject to a penalty equal to the 
greater of--
``(1) the product of the highest rate of tax specified in 
section 1 and the sales price stated on the acknowledgment, or
``(2) the gross proceeds from the sale of such digital 
asset.
``(b) Regulatory Authority.--The Secretary shall prescribe such 
regulations or other guidance as may be necessary to carry out the 
purposes of this section.''.
(2) Clerical amendment.--The table of sections of part I of 
subchapter B of chapter 68 of such Code is amended by adding at 
the end the following new item:

``Sec. 6720D. Fraudulent acknowledgments with respect to donations of 
digital assets.''
(e) Effective Dates.--The amendments made by this section shall 
apply to contributions and acknowledgments made in taxable years 
beginning after the date of enactment of this Act.

SEC. 10. TAX TREATMENT OF CERTAIN DIGITAL ASSET ACTIVITIES.

(a) In General.--Section 7701 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (p) as subsection (q) and by 
inserting after subsection (o) the following new subsection:
``(p) Tax Treatment of Certain Digital Asset Activities.--
``(1) Passive staking not a trade or business.--
``(A) In general.--Passive staking shall not 
constitute a trade or business, including for purposes 
of sections 512 and 864.
``(B) Passive staking.--For purposes of this 
subsection--
``(i) In general.--The term `passive 
staking' means staking by an individual or 
entity that is a passive validator.
``(ii) Passive validator.--The term 
`passive validator' means, with respect to the 
acquisition of any newly created digital asset 
(as defined in section 1400W-3)--
``(I) the person who validated the 
digital asset transactions in 
connection with which such digital 
asset was issued, and
``(II) with respect to which there 
are no deductible business expenses 
relating to such validation activity.
``(2) Digital assets in investment trusts.--For purposes of 
this title, in the case of a digital asset investment trust 
formed to hold digital assets--
``(A) any power held by the trustee to stake or 
unstake digital assets, whether directly or through 
delegation to another party, and to perform any related 
acts to exercise such power to stake, including the 
retention of staking rewards, shall not be treated as a 
power under such trust agreement to vary the investment 
of the certificate holders of such trust and shall not 
otherwise disqualify an entity from characterization as 
an investment trust that is not classified as a 
business entity under this section,
``(B) discretionary powers held by a trustee to use 
other measures, including a borrowing facility, to 
manage the trust's potential need for assets available 
to satisfy redemptions shall not be treated as a power 
under the applicable trust agreement to vary the 
investment of the certificate holders of such trust, 
and
``(C) discretionary powers held by a trustee to act 
in response to changes to technology supporting the 
digital assets held by the trust, including with regard 
to staking, shall not be treated as a power under the 
applicable trust agreement to vary the investment of 
the certificate holders of such trust.''.
(b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2025.

SEC. 11. DEFINITIONS.

Section 7701 of the Internal Revenue Code of 1986, as amended by 
this Act, is amended--
(1) by redesignating subsection (q) as subsection (r), and
(2) by inserting after subsection (p) the following new 
subsection:
``(q) Definitions Related to Digital Assets.--For purposes of this 
title--
``(1) Digital asset.--The term `digital asset' means a 
digital representation of value which is recorded on a 
cryptographically secured distributed ledger or any similar 
technology as specified by the Secretary.
``(2) Digital asset exchange.--The term `digital asset 
exchange' means a platform which facilitates the transfer of 
digital assets by taking custody of, or exercising control 
over, such assets on behalf of users.
``(3) Actively traded digital asset.--
``(A) In general.--The term `actively traded 
digital asset' means, with respect to any taxpayer for 
any taxable year, any digital asset--
``(i) which is fungible,
``(ii) with a minimum trading volume of 
$50,000,000 for the two calendar years 
immediately preceding the sale or exchange of 
such asset,
``(iii) with a minimum yearly market 
capitalization of $10,000,000,000 for the three 
calendar years immediately preceding the sale 
or exchange of such asset, and
``(iv) with respect to which the taxpayer 
and the related parties of the taxpayer hold no 
more than 5 percent by value or units of such 
asset.
``(B) Inflation adjustment.--In the case of any 
calendar year after 2025, each of the dollar amounts in 
subparagraph (A) shall be increased by an amount equal 
to--
``(i) such amount, multiplied by
``(ii) the cost-of-living adjustment 
determined under section 1(f)(3) for such 
calendar year, determined by substituting 
`calendar year 2024' for `calendar year 2016' 
in subparagraph (A)(ii) thereof.
Any increase determined under the preceding sentence 
which is not a multiple of $100,000 shall be rounded to 
the nearest multiple of $100,000.
``(4) Eligible digital asset.--The term `eligible digital 
asset' means a digital asset that--
``(A) is fungible,
``(B) is of a type for which a market price is 
readily ascertainable based on publicly available 
quotations on a digital asset exchange,
``(C) does not represent or confer any ownership 
interest, equity interest, debt obligation, or other 
financial or property right in any entity, asset, 
commodity, or enterprise, and
``(D) is designed and functions as a medium of 
exchange, store of value, or unit of account, and is 
recorded and transferred through distributed ledger or 
blockchain technology.
``(5) Traded digital asset.--The term `traded digital 
asset' means a digital representation of value that--
``(A) is designed and functions as a medium of 
exchange, store of value, or unit of account,
``(B) is recorded and transferred through 
distributed ledger or blockchain technology,
``(C) does not represent or confer any ownership 
interest, equity interest, debt obligation, or other 
financial or property right in any entity, asset, 
commodity, or enterprise, and
``(D) does not derive its value from, or represent 
a claim on, any fiat currency, commodity, security, or 
other financial instrument.
``(6) Validation activity.--The term `validation activity' 
means staking, mining, or similar activities in support of the 
validation of digital asset transactions.
``(7) Mining.--The term `mining', when used in connection 
with a digital asset, means--
``(A) performing computations, or making available 
computing power, in support of the validation of 
digital asset transactions, and
``(B) except as otherwise provided by the 
Secretary, any substantially similar activity.
``(8) Staking.--The term `staking', when used in connection 
with a digital asset, means--
``(A) making such asset available in support of the 
validation of digital asset transactions by pledging, 
deploying, immobilizing, or locking to support 
validation of transactions on a cryptographically 
secured distributed ledger, or
``(B) except as otherwise provided by the 
Secretary, any substantially similar activity.''.

SEC. 12. STUDY AND REPORT ON RELIEF FOR DIGITAL ASSET CONSUMER 
TRANSACTIONS.

(a) Study and Report.--Not later than 1 year after the date of 
enactment of this Act, the Secretary shall submit to Congress a report 
describing--
(1) the estimated compliance burden currently imposed on 
taxpayers by gain recognition requirements for small digital 
asset transactions, expressed in aggregate hours and dollars, 
and disaggregated by income level,
(2) the extent to which information reporting under section 
6045 captures digital asset transactions of $200 or less, 
including the gap attributable to transactions conducted 
without a broker intermediary,
(3) the administrative and technological requirements 
necessary for the Internal Revenue Service to verify taxpayer 
eligibility for a de minimis exclusion within existing 
appropriations,
(4) the potential for abuse of a de minimis exclusion, 
including through transaction fragmentation, the use of 
multiple accounts or wallets, and the mischaracterization of 
investment dispositions as consumer transactions, and the 
mechanisms available to detect and deter such abuse without 
imposing additional taxpayer reporting burdens,
(5) the extent to which any de minimis exclusion could be 
implemented in a manner that maintains consistency between 
taxpayer reporting and third-party information reporting under 
section 6045,
(6) any disparities in reporting, compliance, or 
enforcement between custodial and non-custodial digital asset 
transactions that would arise from a de minimis exclusion,
(7) recommended legislative or regulatory approaches, if 
any, that would provide meaningful consumer relief while 
remaining administrable by the Internal Revenue Service within 
existing resources,
(8) the cost of additional resources that would enable the 
Internal Revenue Service to fully enforce existing laws 
concerning digital assets,
(9) the extent to which tax reporting, compliance, or 
enforcement does not meet Crypto Asset Reporting Framework 
(CARF) standards, with recommended legislative or regulatory 
approaches, if any, that would bring the United States into 
compliance with CARF, and
(10) the extent of tax avoidance risks associated with 
digital asset transactions, including through noncompliance, 
offshore activity, or structuring techniques, and the 
feasibility of establishing a voluntary disclosure program to 
facilitate taxpayer compliance with respect to such 
transactions.
(b) Interim Guidance.--Not later than 180 days after the date of 
enactment of this Act, the Secretary shall issue guidance identifying 
categories of digital asset transactions for which relief from gain or 
loss recognition may be provided under existing authority, including 
where--
(1) compliance burdens are disproportionate relative to 
potential tax liability, and
(2) such relief can be administered without undermining 
information reporting or return matching.
(c) Sense of Congress.--It is the sense of Congress that--
(1) taxpayers should not be subject to undue compliance 
burdens for low-value digital asset transactions undertaken for 
personal consumption,
(2) any de minimis exclusion should be designed to provide 
meaningful relief to users while maintaining the integrity of 
the Federal tax system, and
(3) such relief should be implemented only in a manner that 
is administrable within existing Internal Revenue Service 
resources.
(d) Rule of Construction.--Nothing in this section shall be 
construed to--
(1) create or imply the existence of a de minimis exclusion 
for digital asset transactions, or
(2) provide independent authority to the Secretary to 
implement such an exclusion except to the extent otherwise 
authorized under existing law.
(e) Secretary.--For purposes of this section, the term 
``Secretary'' means the Secretary of the Treasury or the Secretary's 
delegate.
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