What does Preamble of PAR Act do?

This bill proposes to amend the Internal Revenue Code of 1986. The amendment aims to clarify the application of certain rules related to the trading of digital assets. The bill's purpose is 'to clarify the application of certain rules with respect to the trading of digital assets, and for other purposes.'

What does SHORT TITLE; ETC. of PAR Act do?

This Act is formally titled the "Providing Analogous Rules for Digital Assets Act" or the "PAR Act". Amendments or repeals within this Act refer to sections or provisions of the Internal Revenue Code of 1986 unless otherwise specified.

What does TRANSFERS OF TRADED DIGITAL ASSETS PURSUANT TO A LENDING of PAR Act do?

This section amends section 1058 of the Internal Revenue Code, replacing the term 'securities' with 'specified assets' in several subsections. The term 'specified assets' is defined to include both 'securities (as defined in section 1236(c))' and 'traded digital assets'. Payments related to specified assets transferred under a lending agreement must include amounts equivalent to interest, dividends, property, legal entitlements, and other distributions. In transfers of traded digital assets, the transferor assumes all obligations imposed on the owner of those assets during the lending period. Conforming amendments are made to section 1058 and related table of sections to reflect the change from 'securities' to 'specified assets'. The amendments apply to transfers made after the date of enactment of this Act.

What does DEALERS AND TRADERS OF WIDELY TRADED DIGITAL ASSETS. of PAR Act do?

This section amends Section 475 to extend mark-to-market accounting rules to dealers and traders of widely traded digital assets. It defines 'covered digital asset' to include widely traded digital assets, related notional principal contracts, and derivative instruments. Dealers and traders can elect to apply mark-to-market accounting to covered digital assets in the same manner as securities. The amendments modify existing rules regarding mark-to-market accounting for commodities and apply them to covered digital assets. Covered digital assets that are also securities or commodities are not treated as such for purposes of certain subsections. Adjustments resulting from the election of mark-to-market treatment will maintain the same income or loss character as if the property were sold. Conforming amendments are made to Section 475 and its related table of sections. The amendments apply to taxable years beginning after the date of enactment of this Act. Taxpayers changing their accounting methods for covered digital assets may have a four-year spread for adjustments.

What does DIGITAL ASSET TRADING SAFE HARBOR. of PAR Act do?

This section amends Section 864(b)(2) of the Internal Revenue Code. The amendment expands the definition of trading to include 'traded digital assets'. Trading in traded digital assets through an independent agent is included. Trading in traded digital assets for a taxpayer's own account is also included, unless the taxpayer is a dealer in digital assets. The amendments apply to taxable years beginning after December 31, 2025.

What does DEFINITIONS. of PAR Act do?

This section amends Section 7701 of the Internal Revenue Code to define several terms related to digital assets. The term 'digital asset' is defined as any digital representation of value recorded on a cryptographically secured distributed ledger, subject to the Secretary's discretion. A 'traded digital asset' is defined as a fungible digital asset with readily available quotations and not a tokenized digital asset, or a wrapped digital asset referencing another traded digital asset. A 'widely traded digital asset' requires quotations available throughout the year, a market capitalization exceeding $500,000,000, and limited ownership by any single taxpayer. The Secretary has the authority to adjust requirements for identifying traded digital assets and to exclude assets lacking reliable price discovery or at risk of manipulation. The $500,000,000 market capitalization threshold for widely traded digital assets will be adjusted for inflation after 2027. A 'tokenized digital asset' is defined as one where a significant portion of value is not tied to the underlying ledger. A 'wrapped digital asset' is defined as one redeemable on demand for another digital asset, recorded on a different ledger. The term 'qualified U.S. dollar stablecoin' is defined based on criteria outlined in the GENIUS Act. The Secretary may treat qualified U.S. dollar stablecoins as dollars and other stablecoins as currency if it increases federal revenues.

What does RULES OF CONSTRUCTION. of PAR Act do?

This section establishes rules of construction for the Act. The Act does not create an inference regarding whether a digital asset constitutes a security, commodity, debt, equity, stock, partnership interest, or trust. The Act does not create an inference regarding the application of the Internal Revenue Code of 1986 to periods before the Act's effective period.

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PAR Act

Last updated: 6/8/2026 · Introduced: 6/8/2026

Author: David Kustoff (R-TN)

TL;DR (AI)

The PAR Act amends the Internal Revenue Code to expand the definition of 'specified assets' to include traded digital assets, clarifying rules related to lending and transfers of these assets.
This bill extends mark-to-market accounting rules, currently applied to securities, to dealers and traders of widely traded digital assets, allowing them to elect this accounting method.
The Act defines key terms related to digital assets, including 'digital asset,' 'traded digital asset,' and 'widely traded digital asset,' and establishes criteria for identifying these assets, with adjustments for inflation.

119th Congressin committeeOfficial page

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