Senator Cynthia Lummis has introduced legislative proposals to reform cryptocurrency taxation, including a notable de minimis exemption aimed at reducing friction for everyday payments.
The bill establishes a $300 threshold for small crypto transactions, exempting gains or losses below this amount from reporting requirements. This exemption is capped at $5,000 per taxpayer annually. Notably, the exemption explicitly excludes cash equivalents, stablecoins, and property held for business purposes.
Further provisions include allowing businesses to elect mark-to-market accounting for reporting unrealized cryptocurrency gains and losses, capturing value changes annually. The proposal also clarifies that cryptocurrency lending would not constitute a taxable event.
Senator Lummis argues these measures, particularly the $300 de minimis exemption, reduce administrative burdens and tax complexity associated with low-value crypto payments. The reforms aim to enhance the viability of cryptocurrency as a practical medium of exchange for daily transactions.
The proposal aligns with broader legislative efforts, notably complementing goals of the previously introduced GENIUS Act, to seamlessly integrate digital assets into the established financial framework.
Support within the cryptocurrency industry is reported, with experts highlighting the potential benefits these changes offer for increasing adoption and achieving needed regulatory clarity.