Crypto Tax Clarity Bill Introduced
Wyoming Senator Cynthia Lummis has submitted a draft crypto tax bill to the U.S. government seeking to eliminate double taxation and modernize the current system. The bill follows failed attempts to include crypto provisions in the most recent federal budget.
Everyday Use Exemptions
The bill introduces a de minimis exemption:
- Capital gains under $300 will not be taxed
- An annual exemption cap of $5,000 is proposed
This change would allow Americans to use crypto for everyday purchases—like buying coffee—without tax complications.
“This law removes unnecessary barriers and provides simple rules for Americans to participate in the digital economy without fearing tax violations,” Lummis stated.
Key Provisions in the Crypto Tax Bill
Deferred Tax on Staking and Mining
Taxes on income from staking and mining will apply only when the asset is sold, not when it’s earned. This eliminates tax on unsold crypto rewards.
Tax-Free Charitable Donations
Crypto donations to qualified charities will be exempt from taxation, removing hurdles for philanthropy through digital assets.
DeFi-Friendly Lending Rules
Crypto lending agreements, especially within DeFi, will not be taxed, making it easier for users to remain compliant.
Mark-to-Market for Digital Asset Traders
Crypto dealers and traders will be taxed using mark-to-market accounting, aligning crypto treatment with traditional assets like stocks and commodities.
Income Recognition Aligned with Gains
Tax will only be due once an asset is sold, helping investors avoid liquidity issues from taxes on unrealized gains.
Financial Impact and Political Outlook
The Congressional Joint Committee on Taxation estimates the bill could raise $600 million in revenue between 2025 and 2034.
As a leader of the Senate Banking Subcommittee on Digital Assets, Senator Lummis continues to champion crypto-friendly regulation. She also supports creating a Bitcoin reserve managed by the U.S. Treasury.
With a more crypto-positive administration in office, and growing support from the Web3 community, this legislation may finally gain traction.
Conclusion
Senator Lummis’s tax proposal is a forward-thinking effort to align U.S. tax law with the realities of the crypto economy. By eliminating double taxation, simplifying rules, and encouraging responsible innovation, the bill stands a good chance of becoming law—fueled by political momentum, industry backing, and sound legislative leadership.
