Sen. Lummis’ crypto tax bill eases rules, exempts $300 transactions, ends double taxation on mining/staking, and simplifies lending, donations.
U.S. Senator Cynthia Lummis has introduced a significant new law regarding digital asset taxation. The legislation is designed to simplify the lives of Americans who invest in or use digital assets such as Bitcoin.
- 1 Senator Lummis’ Bill introduces Tax Relief for Daily Crypto Tax Use, Mining, and Staking
- 2 A New Bill Is Designed to Facilitate Crypto Lending and Promote Charitable Giving
- 3 Senator Lummis neglected to incorporate a proposal for more equitable cryptocurrency tax regulations into significant legislation
Senator Lummis’ Bill introduces Tax Relief for Daily Crypto Tax Use, Mining, and Staking
In a recent post on X, Lummis disclosed information regarding the measure. She believes that the current tax regulations are antiquated and detrimental to innovation. Therefore, she is committed to ensuring that the United States remains competitive in the expanding digital economy.
A de minimis exemption, a unique $300 rule, is incorporated into the bill. Crypto tax reporting will not be initiated for transactions less than $300, as per this regulation.
This implies that individuals can utilize cryptocurrency for their daily expenses, such as coffee, without experiencing tax complications. The rule also restricts the total tax-free gains to $5,000 annually.
Nevertheless, the $300 threshold will be adjusted for inflation in 2026. Crypto mining and staking are additional critical components of the legislation.
Currently, miners and stakers frequently pay crypto tax upon receiving tokens, regardless of whether they ultimately sell them. The new measure alters this by requiring taxes to be paid only when the tokens are sold or utilized.
A New Bill Is Designed to Facilitate Crypto Lending and Promote Charitable Giving
This would facilitate tax planning and prevent financial flow issues. Lummis also intends to simplify the process of lending cryptocurrency.
The law provides an extension of the tax regulations for securities lending to digital assets. This implies that the temporary financing of cryptocurrency will not be subject to crypto tax. This modification has the potential to enhance liquidity in the crypto space and stimulate lending markets.
The bill also addresses the issue of laundry sales. Investors can sell cryptocurrency at a loss and promptly repurchase it to reduce their crypto tax under the current legislation.
The bill would implement the 30-day cleanse sale rule for cryptocurrency. This action eliminates a loophole and ensures that the tax regulations for crypto assets are consistent with those for equities.
Another area of emphasis is charitable contributions. Currently, donating cryptocurrency necessitates an appraisal, which can be both complex and expensive.
The new legislation would eliminate this requirement for digital assets that are actively traded. This modification may facilitate the donation of cryptocurrency to charitable organizations.
Senator Lummis neglected to incorporate a proposal for more equitable cryptocurrency tax regulations into significant legislation
Additionally, the measure includes the option to implement mark-to-market accounting. This enables traders to disclose income based on the value at the end of the year, rather than actual sales.
Senator Lummis has invited the public to submit their thoughts on the legislation. Lummis attempted to incorporate her crypto tax measure into the Big Beautiful measure; however, this endeavor was unsuccessful before the bill’s passage.
A few days ago, the senator proposed a more straightforward version of this measure, which primarily aimed to assist Bitcoin miners in avoiding a double crypto tax.
