#uscryptostakingtaxreview The Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields (PARITY) Act is a bipartisan discussion draft of proposed U.S. legislation released on December 20, 2025, by Representatives Max Miller (R-OH) and Steven Horsford (D-NV).It is not yet a formally introduced bill—it remains in the discussion phase, open for public and stakeholder feedback, with the goal of potential formal introduction and passage in 2026. The draft aims to reform and modernize the U.S. tax treatment of digital assets, bringing it closer to how traditional financial assets (stocks, bonds, commodities) are taxed, while closing loopholes and reducing compliance burdens for everyday users.The PARITY Act is primarily a tax-focused proposal, unlike broader regulatory frameworks such as the GENIUS Act (stablecoin issuance) or MiCA (EU crypto regulation).Key ProvisionsThe draft includes several targeted changes:De Minimis Exemption for Small Stablecoin Transactions:Exempts capital gains taxes on personal transactions under $200 using GENIUS Act-compliant (regulated, dollar-pegged) payment stablecoins.Allows people to use qualifying stablecoins like cash for everyday purchases (coffee, groceries) without tracking tiny gains or losses.Includes anti-abuse rules (e.g., prevents splitting larger payments to stay under the limit).Effective for tax years beginning after December 31, 2025 (if enacted).Staking and Mining Rewards Tax Deferral:Introduces an optional five-year deferral of income tax on staking and mining rewards.Currently, the IRS taxes these rewards as ordinary income at fair market value when received (even if not sold), plus capital gains later—often criticized as “double taxation.”Under the proposal, taxpayers could defer the income tax until the rewards are sold or after five years, whichever comes first.Alignment with Traditional Asset Rules:Applies wash sale rules to crypto (currently exempt), preventing tax-loss harvesting by repurchasing substantially identical assets within 30 days.Allows professional traders/dealers to elect mark-to-market accounting (taxing unrealized gains/losses annually at ordinary rates).Treats qualified crypto lending (returning the same asset type) as non-taxable, similar to securities lending.Clarifies charitable donations and passive staking treatment.Compliance and Revenue Protection:Strengthens reporting to address an estimated $50 billion annual tax gap from unreported crypto transactions.Balances innovation with fairness and enforcement.Why It MattersThe PARITY Act directly responds to long-standing crypto community complaints about overly burdensome and unclear tax rules—especially for small transactions and staking rewards. If enacted (even partially), it could:Reduce short-term market uncertainty around staking-heavy assets (ETH, SOL, ADA).Encourage greater retail and institutional participation in staking and stablecoin payments.Make the U.S. tax system more competitive globally.As of December 23, 2025, the draft has received positive initial feedback from industry groups but faces typical legislative hurdles (committee review, amendments, political priorities). Provisions may change significantly before any final law.This is not tax or legal advice. Crypto tax rules are complex and subject to change. Always consult a qualified tax professional for your specific situation, and monitor official congressional sources for updates.