Digital Asset PARITY Act

Bill Number

H.R. 8899

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Taxation

Status

Introduced

Latest Action

2026-05-19: Referred to the House Committee on Ways and Means.

Last Updated

2026-06-08T17:56:20Z

AI-Generated Summary

Purpose of the legislation This bill amends the Internal Revenue Code of 1986 to establish specific tax rules for digital assets, including stablecoins, trading activities, lending, wash sales, mark-to-market accounting, constructive sales, staking and mining rewards, charitable contributions, and investment trusts. It aims to clarify tax treatment and reduce uncertainty in these areas.

Key provisions outlined

• Regulated payment stablecoins: No gain or loss is recognized on sales or exchanges unless the taxpayer's basis is below 99 percent of the redemption value. Exchanges set the acquirer's basis at $1. Transaction costs are excluded from basis. Applies only to stablecoins issued by permitted issuers and acquired near $1.00.
• Trading safe harbor: Trading in traded digital assets through U.S. brokers or for one's own account generally does not create a U.S. trade or business for foreign persons.
• Lending agreements: Extends nonrecognition treatment under section 1058 to eligible digital assets. Substitute payments (such as staking rewards) are included in the lender's income.
• Wash sale rules: Applies wash sale loss disallowance to digital assets and contracts or options on them. Defines "substantially identical" based on economic exposure rather than technical differences like blockchain or voting rights.
• Mark-to-market election: Allows dealers and traders in actively traded digital assets to elect mark-to-market treatment similar to securities.
• Constructive sale rules: Extends rules under section 1259 to digital assets.
• Validation activities (staking/mining): Requires inclusion of newly created digital assets in gross income at fair market value, with an option to elect deferral and capitalize costs. Gains or losses during the election period are ordinary.
• Charitable contributions: Requires substantiation for infrequently traded digital assets over $500, including sale proceeds if the donee sells the asset. Creates penalties for fraudulent acknowledgments. Actively traded digital assets are exempt from certain appraisal rules.
• Certain activities: Passive staking is not treated as a trade or business. Digital asset investment trusts retain investment trust status even with staking powers.
• Definitions: Establishes terms such as digital asset, actively traded digital asset (with volume and market cap thresholds), eligible digital asset, traded digital asset, mining, staking, and validation activity.
• Study requirement: Directs the Treasury to study compliance burdens for small digital asset transactions and report on potential de minimis relief within one year, with interim guidance due in 180 days.

Significant changes to existing law introduced The bill extends existing rules for securities (such as wash sales, mark-to-market, constructive sales, and lending treatment) to digital assets. It creates a new subchapter for taxation of staking and mining rewards and adds specific substantiation rules for digital asset charitable contributions. It also introduces a safe harbor for foreign digital asset trading and clarifies that passive staking does not constitute a trade or business.

Potential impacts on government agencies, citizens, or international relations

• Government agencies (particularly the IRS) would face new reporting, enforcement, and study obligations, including verification of elections and substantiation requirements.
• Citizens and businesses engaged in digital asset activities would encounter clearer but more detailed tax compliance rules, potentially affecting how gains, losses, and income from staking or lending are reported.
• International relations could be affected through the trading safe harbor, which may influence where foreign persons conduct digital asset trading. No direct impacts on foreign governments are specified.

Main stakeholders affected by this legislation

• Taxpayers who buy, sell, lend, stake, or donate digital assets.
• Digital asset exchanges, brokers, custodians, and dealers.
• Stablecoin issuers and users.
• Charitable organizations receiving digital asset donations.
• The Department of the Treasury and Internal Revenue Service.
• Foreign persons trading digital assets through U.S. intermediaries.

Notable legal, constitutional, or political implications The legislation operates within Congress's authority to lay and collect taxes. It includes rules of construction stating that nothing in the bill creates inferences about whether digital assets qualify as securities under securities laws. The bill does not alter existing constitutional limits on taxation or create new regulatory authority beyond tax administration.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Miller, Max L. [R-OH-7]

Cosponsors (3)

Rep. Horsford, Steven [D-NV-4], Rep. Carey, Mike [R-OH-15], Rep. DelBene, Suzan K. [D-WA-1]

Recent Actions

• 2026-05-19: Referred to the House Committee on Ways and Means.
• 2026-05-19: Introduced in House
• 2026-05-19: Introduced in House

Bill Versions

• Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields Act — issued 2026-05-19 — PDF (31 pages)