Representatives Horsford and Miller have reintroduced the PARITY Act, a revised crypto tax bill that applies stock-market wash sale rules to digital assets while offering tax deferral on staking and mining rewards.
Two members of the US House of Representatives have reintroduced a bipartisan bill that would overhaul how digital assets are taxed — closing the wash sale loophole that crypto traders have exploited for years while offering meaningful concessions on staking, mining, and everyday stablecoin payments.
The Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields Act — mercifully shortened to PARITY — was first circulated as a discussion draft in December by Representatives Steven Horsford, a Nevada Democrat, and Max Miller, an Ohio Republican. The revised version, released on 26 March, makes several substantive changes to the original text and is expected to be formally introduced as a bill this spring.
The headline provision targets wash sales. Under current US tax law, investors in stocks and securities cannot sell an asset at a loss and repurchase substantially the same asset within 30 days while still claiming the tax deduction. Crypto has been exempt from this rule — an anomaly that has allowed traders to harvest losses continuously, selling and immediately rebuying bitcoin or ether to generate paper losses that offset gains elsewhere in their portfolio. The PARITY Act would end that by applying the same 30-day wash sale window to digital assets.
In exchange, the bill offers something the crypto industry has wanted for years: tax deferral on staking and mining rewards. Under the current regime, validators and miners owe income tax on rewards the moment they receive them, at their fair market value on that date. This creates the absurd situation where a staker can owe tax on rewards that subsequently lose 80 per cent of their value before they sell. The PARITY Act would defer that tax liability until the tokens are actually sold — a change that aligns the treatment of staking rewards more closely with how unrealised capital gains on traditional assets work.
The March revision also reworked the stablecoin provisions significantly. The December draft had proposed a $200 de minimis exemption for small stablecoin transactions, mirroring a similar threshold for foreign currency transactions. The new version takes a different approach: it creates a new section 1034 of the Tax Code stipulating that no gain or loss is recognised on the sale of a regulated payment stablecoin unless the taxpayer's cost basis is less than 99 per cent of the redemption value. For exchanges, the bill sets a $1 recognised cost basis.
The practical effect is that someone buying coffee with USDC won't owe capital gains tax on the fraction-of-a-cent appreciation between when they acquired the stablecoin and when they spent it — a problem that has technically existed since the IRS classified crypto as property in 2014 but that nobody has ever seriously enforced. The GENIUS Act, which established the federal stablecoin framework signed into law earlier this year, addressed the regulatory side of stablecoins but left the tax treatment untouched. The PARITY Act would fill that gap.
Whether the bill passes is another matter. The current Congress has shown appetite for crypto legislation — the GENIUS Act's passage proved that — but tax bills face a fundamentally different political calculus. The wash sale closure would raise revenue; the staking deferral and stablecoin exemptions would lose it. The Congressional Budget Office has not yet scored the bill, and its prospects depend heavily on whether the net revenue impact is positive enough to attract support from fiscal hawks, or whether the concessions to the industry make it look like a giveaway.
The CLARITY Act, which addresses market structure, is consuming most of the oxygen in crypto policy circles right now, and Horsford and Miller will need to find legislative real estate for their tax bill without getting squeezed out by the larger fight over which regulator oversees which tokens. The fact that PARITY is bipartisan helps; the fact that it touches the tax code — always the most politically fraught area of legislation — does not.
The crypto industry's initial reaction has been cautiously positive. The wash sale closure is a concession most serious participants have accepted as inevitable, and the staking deferral alone would be worth the trade-off for validators running operations with significant hardware and energy costs. If the bill moves to markup this session, it would represent the first comprehensive update to crypto tax policy since the infrastructure bill's broker reporting requirements in 2021.
