Senator Lummis Introduces Crypto Tax Bill to Reduce Tax On Bitcoin Transactions

U.S. Senator Cynthia Lummis has introduced a major new bill focused on digital asset taxation. The legislation aims to make life easier for Americans who use or invest in digital assets like Bitcoin.

Senator Lummis’ Bill Introduces Tax Relief for Daily Crypto Tax Use, Mining, and Staking

Lummis shared details about the bill in a new X post. She believes that current tax rules are outdated and hurt innovation. Hence, she wants to help the United States remain competitive in the growing digital economy.

The bill includes a special $300 rule known as a de minimis exemption. Under this rule, small transactions under $300 will not trigger crypto tax reporting.

This means people can use crypto for daily purchases, like coffee, without worrying about tax headaches. The rule also limits the total tax-free gains to $5,000 per year.

However, starting in 2026, the $300 threshold will adjust for inflation. Another key part of the bill focuses on crypto mining and staking.

Right now, miners and stakers often owe crypto tax as soon as they receive tokens, even if they do not sell them. The new bill changes this as taxes would only be due when they actually sell or use the tokens.

New Bill Aims to Simplify Crypto Lending and Encourage Charitable Giving

This would help avoid cash flow problems and make tax planning easier. Lummis also wants to make crypto lending simpler.

The bill extends the tax rules for securities lending to digital assets. This means lending out crypto temporarily will not be subject to crypto tax. This change could help boost lending markets and increase liquidity in the crypto space.

The bill also tackles the issue of wash sales. Under current law, investors can sell crypto at a loss and quickly buy it back to lower their crypto tax.

The bill would apply the 30-day wash sale rule to crypto. This move closes a loophole and aligns crypto tax rules with those for stocks.

Charitable giving is another area of focus. Today, donating crypto usually requires an appraisal, which can be costly and complicated.

The new bill would remove this requirement for actively traded digital assets. This change could make it easier for people to give crypto to charity.

Senator Lummis Failed to Attach Fairer Crypto Tax Rules Proposal to Major Legislation

The bill also introduces an option to use mark-to-market accounting. This allows traders to report income based on the value at year-end instead of actual sales.

Senator Lummis has invited public comments regarding the bill. Lummis wanted to include her crypto tax bill in the Big Beautiful Bill but that was unsuccessful before that bill was passed.

A few days ago, the senator proposed a simpler version of this bill which mainly focused on helping Bitcoin miners avoid double crypto tax.