House Panel Advances Crypto Tax Bill with $10 Fee Exemption

The House Ways and Means Committee approved H.R. 10357 by a 38-5 vote on Sept. 16. This action advances the Digital Asset Tax Certainty Act to the full House. The legislation establishes a tax framework for digital assets. It includes specific concessions for network and transaction fees.

The bill eliminates gain or loss recognition for qualifying fees up to $10. This applies to dispositions after Dec. 31, 2027. The provision addresses a specific IRS treatment of digital assets as property. It removes a taxable event for small blockchain fee payments.

Staking rewards face immediate taxation

The legislation treats staking and mining rewards as ordinary income. It does not include the deferral requested by industry groups. This creates potential tax liabilities before tokens are sold. The bill directs Treasury to issue DAO guidance within 12 months.

Industry leaders argue the current timing of income recognition remains problematic. They seek changes to align tax events with actual token sales. The Crypto Council for Innovation called the vote a historic step. They noted that lawmakers still have room to refine these rules.

Broader payment relief remains unresolved

The $10 fee exemption does not cover all small purchases. It applies only to qualifying network and transaction charges. The asset used to pay the fee must match the underlying transfer asset. This distinction limits the scope of the de minimis relief.

The package provides special treatment for qualifying US dollar stablecoins. It creates a simplified accounting election for widely traded digital assets. These measures aim to reduce administrative burdens for market participants. The committee describes these provisions as aligning digital assets with traditional financial instruments.

Tightened rules close tax avoidance strategies

H.R. 10357 extends wash-sale provisions to digital assets. It also includes constructive-sale rules. These changes close tax strategies previously available to cryptocurrency holders. The bill extends existing financial-market treatment to lending safe harbors. It includes mark-to-market accounting for eligible dealers and traders.

The committee ordered the amended bill favorably reported. It adopted Chairman Jason Smith’s substitute. The bill now moves to the full House for final consideration. Industry groups are pressing for technical fixes before passage.