House Bill Proposes Tax Exemption for Digital Asset Fees Under $10

A bipartisan bill in the US House of Representatives aims to clarify tax rules for digital assets. The legislation, proposed by Rep. Tom Smith, targets fees under $10 and closes a 'wash sale' loophole that allowed traders to sell at a loss and buy back the same asset immediately.

The bill would exempt network or transaction fees under $10 from taxes, effectively covering almost all users of digital assets who engage in transactions on blockchains. However, high-frequency traders and automated strategies are excluded if they engaged in more than 5,000 transfers over the prior year.

The legislation also applies wash-sale and constructive-sale rules to digital assets, excluding qualified U.S. dollar stablecoins. This provision is estimated to generate $2.074 billion in revenue over fiscal 2026 through 2036.

Another provision would allow miners and stakers to defer income on newly created tokens until they sell them, with an estimated cost of $2.956 billion over the same decade. However, there is speculation that this provision might be dropped or modified during the markup process.