House Committee to Consider Crypto Tax Break Legislation

The House Ways and Means Committee will review legislation on Sept. 16 that aims to exempt certain crypto transaction fees from capital-gains calculations and introduce new federal tax rules for stablecoins, staking, mining, and digital asset trading. Committee Chairman Jason Smith introduced the 114-page Digital Asset Tax Certainty Act, or H.R. 10357. The proposed legislation includes a 'de minimis' exemption for network or transaction fees of 10 dollars or less, allowing taxpayers to disregard gains or losses on eligible fees. Currently, paying blockchain fees with crypto can trigger taxable events as the IRS classifies digital assets as property. The bill also proposes using the redemption value of dollar-pegged stablecoins as their tax basis, taxing mining and staking rewards as ordinary income, and permitting certain investment trusts to stake assets without affecting their tax status. Previous proposals to defer income recognition for newly created mining and staking rewards are not included in H.R. 10357. Additionally, the bill would extend wash-sale rules to digital assets, exempt qualifying crypto loans from being treated as sales, and establish a Treasury program for eligible taxpayers to amend past returns and settle outstanding taxes, interest, and penalties. The proposal needs to pass the committee and gain approval from the House, Senate, and President to become law.

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