Digital Asset Tax Certainty Act

This bill amends the Internal Revenue Code to reform the tax treatment of digital assets. It removes tax barriers to using digital assets as a medium of exchange, provides parity between digital assets and traditional financial assets, applies existing anti-abuse rules to digital assets, clarifies the tax treatment of mining and staking, ensures appropriate tax compliance burdens, and defines key terms.

Title I, Removing tax barriers to the use of digital assets as a medium of exchange: Sec. 101 creates an exception so that no gain or loss is recognized on the disposition of a digital asset to pay a de minimis network or transaction fee, with a $10 threshold. Sec. 102 allows taxpayers to elect simplified accounting for gain and loss on widely traded digital assets. Sec. 103 provides that the basis of a qualified U.S. dollar stablecoin acquired in a sale or exchange is its redemption value, unless the consideration provided is less than 99.5% of that value.

Title II, Providing parity between digital assets and comparable traditional financial assets: Sec. 201 extends the nonrecognition treatment for securities lending agreements to traded digital assets. Sec. 202 allows dealers in covered digital assets to elect mark-to-market accounting. Sec. 203 creates a safe harbor so that trading in traded digital assets through a resident agent does not create a U.S. trade or business. Sec. 204 exempts qualified U.S. dollar stablecoins and widely traded digital assets from certain appraisal requirements for charitable contributions and limits deductions for other digital assets.

Title III, Applying existing tax anti-abuse rules to digital assets: Sec. 301 applies wash sale rules to traded digital assets, treating them like stock or securities. Sec. 302 applies constructive sale rules to digital assets. Sec. 303 includes digital assets in subpart F foreign personal holding company income and PFIC rules, with exceptions for active validation income. Sec. 304 requires certain U.S. possessions residents to report traded digital assets. Sec. 305 exempts qualified U.S. dollar stablecoins from registration-required obligation rules. Sec. 306 treats worthless digital assets as sold on the last day of the taxable year. Sec. 307 treats traded digital assets as marketable securities for partnership distributions.

Title IV, Clarifying the tax treatment of mining and staking: Sec. 401 sources income from digital asset validation supporting activities based on the taxpayer's residence. Sec. 402 provides that a trust does not lose its trust status solely because the trustee engages in staking digital assets.

Title V, Ensuring appropriate tax compliance burden: Sec. 501 modifies broker reporting requirements for specified digital assets, excluding certain qualified U.S. dollar stablecoins. Sec. 502 directs the Treasury to establish a Digital Asset Voluntary Disclosure Program within 12 months for eligible taxpayers to remedy digital asset violations. Sec. 503 requires a Treasury study on using new digital technologies for compliance and reporting.

Title VI, Definitions; regulations; rules of construction: Sec. 601 defines key terms like digital asset, traded digital asset, widely traded digital asset, qualified U.S. dollar stablecoin, and tokenized digital asset. Sec. 602 expresses the sense of Congress that Treasury should issue regulations on various digital asset tax issues. Sec. 603 states that the Act does not create inferences about whether a digital asset is a security or commodity for other laws, or about prior tax periods.

Title VII, Full House Act: Sec. 701 reinstates the rule that wagering losses are allowed only to the extent of wagering gains, effective for taxable years beginning after December 31, 2025.