#uscryptostakingtaxreview The Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields (PARITY) Act is a bipartisan discussion draft of proposed U.S. legislation introduced on December 20, 2025, by Representatives Max Miller (R-OH) and Steven Horsford (D-NV). It aims to modernize the U.S. tax code for digital assets by providing clarity, reducing compliance burdens, aligning crypto taxation with traditional financial assets (like stocks and commodities), and closing potential loopholes for tax abuse.As of December 23, 2025, it remains a discussion draft—not yet a formal bill introduced in Congress—but it has generated significant attention in the crypto community for addressing long-standing tax pain points.Key ProvisionsThe draft focuses on practical reforms rather than broad new restrictions. Highlights include:Stablecoin Transactions Exemption: Capital gains taxes would be exempted for personal transactions under $200 using regulated, dollar-pegged payment stablecoins (e.g., those compliant with recent laws like the GENIUS Act).This treats qualifying stablecoins more like cash for everyday purchases (e.g., buying coffee), eliminating the need to track gains/losses on small payments. Anti-abuse rules prevent splitting larger transactions to exploit the exemption.Effective for tax years beginning after December 31, 2025.Staking and Mining Rewards:Offers an optional five-year tax deferral on rewards earned from staking or mining.Currently, the IRS taxes these rewards as ordinary income at fair market value upon receipt (creating "phantom income" issues), with potential capital gains later on sale—leading to criticism of double taxation.The proposal allows deferral until sale or after five years, providing a compromise to encourage participation in proof-of-stake networks without immediate tax hits.Alignment with Traditional Finance Rules:Extends wash sale rules to digital assets (preventing tax loss harvesting by repurchasing similar assets within 30 days).Allows mark-to-market accounting elections for professional traders/dealers.Treats qualified digital asset lending (returning the same type of asset) as non-taxable, similar to securities lending.Modernizes rules for charitable donations of digital assets and clarifies that passive staking by funds isn't a "trade or business."Other Guardrails:Closes anti-abuse gaps, strengthens reporting, and aims to reduce a reported $50 billion tax gap from unreported crypto transactions.Why It MattersThe PARITY Act responds to ongoing debates about crypto taxation, including recent bipartisan calls for the IRS to review staking rules before 2026. Proponents argue it will boost innovation, attract institutional investment, encourage stablecoin use as a payment tool, and position the U.S. as a global crypto leader—while maintaining fairness and compliance.If advanced and enacted, it could significantly reduce short-term volatility concerns around staking-heavy assets (like ETH, SOL, ADA) and foster long-term growth. However, as a draft, provisions may change based on feedback.For the latest developments, check official sources like congressional websites or reputable crypto news outlets. This is not tax advice—consult a professional for personal implications.