Less Tax Paperwork for Digital Asset Owners Act

This bill amends the Internal Revenue Code to reduce tax compliance burdens for digital asset owners by creating exceptions and simplified accounting methods for certain digital asset transactions. Sec. 2, De minimis digital asset network fees: No gain or loss is recognized on the disposition of a digital asset to pay a network fee of $10 or less, with exceptions for traders, brokers, dealers, and those with over 5,000 transactions in the prior year, unless an administrative convenience exception applies. Sec. 3, Simplified accounting for widely traded digital assets: Taxpayers may elect to recognize gain or loss on a designated type of widely traded digital asset based on the net change in fair market value of holdings and transactions during the taxable year, with gain or loss treated as short-term capital gain or loss. Sec. 4, U.S. dollar stablecoin transactions: For qualified U.S. dollar stablecoins, basis is generally set at redemption value, and gain or loss on sale or exchange is determined as if sold for redemption value, with exceptions for traders, brokers, dealers, and those with over 5,000 such transactions in the prior year. Sec. 5, Broker requirements: Brokers are not required to report dispositions of digital assets where no gain or loss is recognized due to de minimis network fees or where simplified accounting is elected, but must report aggregate information as specified by the Secretary, effective for returns after December 31, 2027. Sec. 6, Definitions: Defines key terms including digital asset, traded digital asset, widely traded digital asset (with market capitalization over $500,000,000, adjusted for inflation after 2027), tokenized digital asset, wrapped digital asset, and reference digital asset.