What does Preamble of Less Tax Paperwork for Digital Asset Owners Act do?

This bill proposes to amend the Internal Revenue Code of 1986. The stated purpose is to reduce certain tax compliance burdens related to digital asset ownership.

What does SHORT TITLE; ETC. of Less Tax Paperwork for Digital Asset Owners Act do?

This Act is formally titled the 'Less Tax Paperwork for Digital Asset Owners Act'. The Act specifies that references to amendments or repeals apply to sections or provisions of the Internal Revenue Code of 1986 unless otherwise stated.

What does TREATMENT OF DE MINIMIS DIGITAL ASSET NETWORK FEES. of Less Tax Paperwork for Digital Asset Owners Act do?

This section amends Part III of subchapter O of chapter 1 of subtitle A to insert a new section 1044 regarding de minimis network fee exceptions. It establishes that no gain or loss is recognized on the disposition of a digital asset in payment of a de minimis network fee. A 'de minimis network fee' is defined as an amount paid to validate another digital asset transaction not exceeding $10. The bill specifies that a disposition of a digital asset used to pay a network fee is treated as a disposition in exchange for consideration equal to its fair market value. Certain entities, including traders, brokers, and dealers in digital assets, are excluded from the exception. The Secretary has the authority to issue regulations and guidance to prevent abuse of the section, including transaction structuring and receipt of value beyond validation. The amendments apply to the disposition of assets after December 31, 2027.

What does SIMPLIFIED ACCOUNTING FOR GAIN AND LOSS ON WIDELY TRADED of Less Tax Paperwork for Digital Asset Owners Act do?

This section amends Part IV of subchapter O of chapter 1 of subtitle A to allow an election for simplified accounting of gain and loss on widely traded digital assets. Taxpayers electing this simplified accounting recognize gain or loss equal to the excess of certain amounts realized and held over amounts paid for acquisition. Losses are calculated similarly, with the amounts reversed. Except as provided, taxpayers do not recognize gain or loss on the disposition of widely traded digital assets under this election. A 'designated type of digital asset' is defined as any type of widely traded digital asset for which a taxpayer makes an election. The election applies to the first taxable year beginning after the election date and each subsequent year unless revoked. Partnerships and S corporations make the election at the entity level. The amendments apply to taxable years beginning after December 31, 2027.

What does TREATMENT OF U.S. DOLLAR STABLECOIN TRANSACTIONS. of Less Tax Paperwork for Digital Asset Owners Act do?

This section amends Part IV of subchapter O of chapter 1 of subtitle A to address the treatment of U.S. dollar stablecoin transactions. It establishes rules for determining the basis and gain or loss of qualified U.S. dollar stablecoins in sales or exchanges. The basis of a qualified U.S. dollar stablecoin is generally its redemption value, but this may not apply if it's unreasonable to conclude the consideration provided was not less than 99.5 percent of the redemption value. Exceptions apply to taxpayers who are traders, brokers, or dealers in qualified U.S. dollar stablecoins, or those engaged in a substantially similar trade or business, or those with over 5,000 relevant transactions. Taxpayers using a functional currency other than the dollar, and sales/exchanges between related parties, are also subject to specific adjustments. The term 'redemption value' is defined as the dollar amount for which the issuer is obligated to convert, redeem, or repurchase the stablecoin. The Secretary is authorized to issue regulations to carry out the purposes of this section.

What does BROKER REQUIREMENTS. of Less Tax Paperwork for Digital Asset Owners Act do?

This section amends Section 6045(g)(3)(D) to define 'specified digital asset' as any digital asset other than a qualified U.S. dollar stablecoin where the customer's basis is at least 99.5 percent of the stablecoin's redemption value. It makes conforming amendments to Sections 6045(c)(1)(D) and 6045(g)(3) to replace 'digital assets' with 'specified digital assets'. It adds a new paragraph (7) to Section 6045(g) to establish special rules for digital assets used to pay a de minimis validation fee, potentially exempting dispositions from certain reporting requirements. It adds a new paragraph (8) to Section 6045(g) to establish special rules for simplified accounting for widely traded digital assets where an election under Section 1051 applies. The amendments apply to returns and statements filed after December 31, 2027.

What does DEFINITIONS. of Less Tax Paperwork for Digital Asset Owners Act do?

This section amends Section 7701 to define several terms related to digital assets for purposes of the title. It defines 'digital asset' as any digital representation of value recorded on a cryptographically secured distributed ledger, subject to 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 a 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 taxpayer. The Secretary has authority to adjust requirements for identifying traded digital assets and to exclude assets lacking reliable price discovery. The $500,000,000 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 unrelated to the distributed ledger, excluding qualified U.S. dollar stablecoins. 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 the GENIUS Act. The Secretary may treat qualified U.S. dollar stablecoins as dollars and other stablecoins as currency to increase federal revenues.

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Less Tax Paperwork for Digital Asset Owners Act

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

Author: Rudy Yakym (R-IN)

TL;DR (AI)

This bill establishes an exception from capital gains recognition for digital asset transactions involving de minimis network fees, defined as payments up to $10 for transaction validation, excluding certain large entities.
It allows taxpayers to elect simplified accounting for gain and loss on 'widely traded digital assets,' calculated based on the difference between the asset's sale price and acquisition cost.
The bill establishes rules for determining the basis and gain or loss of qualified U.S. dollar stablecoin transactions, generally using the stablecoin's redemption value as the basis.
It modifies broker reporting requirements for digital asset transactions, creating distinctions between 'specified digital assets' and 'qualified U.S. dollar stablecoins' to potentially exempt certain transactions.
The bill defines key terms related to digital assets, including 'digital asset,' 'traded digital asset,' 'widely traded digital asset,' and 'qualified U.S. dollar stablecoin,' establishing criteria for identifying and classifying these assets.

119th Congressin committeeOfficial page

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