US Lawmakers Propose PARITY Act to Overhaul Crypto Tax Regulations

Core Viewpoint - The Digital Asset PARITY Act aims to modernize crypto tax regulations, addressing key loopholes while providing tax relief for staking rewards and everyday payments [1][2]. Group 1: Key Provisions - The legislation applies "wash sale" and "constructive sale" rules to digital assets, aligning them with equity market regulations, which could potentially raise billions in federal revenue [2]. - If enacted, traders would need to wait 30 days before repurchasing an asset to claim a loss, fundamentally altering portfolio management strategies during market downturns [3]. Group 2: Tax Relief Measures - The bill introduces a 'De Minimis' exemption, allowing miners and validators to defer taxes on staking rewards for up to 5 years or until the assets are sold [4]. - This change addresses the issue of "phantom income," where validators receive rewards in illiquid tokens, thus alleviating liquidity pressures on US-based mining and staking operations [5].