Daines' Digital Asset Tax Bill Aims to Simplify Crypto Transactions

U.S. Senator Steve Daines has introduced the Aligning Digital Assets with Principles of Taxation Act (ADAPT Act), a 56-page digital asset tax bill aimed at clarifying the tax treatment of cryptocurrency transactions.

The proposal, which follows a broader effort in Congress to address the tax treatment of digital assets used for payments, would exempt certain stablecoin payments from capital gains taxes. It would also extend wash-sale and constructive-sale rules to digital assets, limiting the ability to claim a loss when substantially identical assets are acquired around the time of a sale.

The bill's central provision would remove gain or loss recognition when taxpayers use regulated U.S. dollar stablecoins for purchases of goods and services, subject to conditions set out in the legislation. The proposal also provides relief from broker information reporting for qualifying consumer transactions, excluding trader and dealer activity from the exemption.