H.R. 10357
Digital Asset Tax Certainty Act
Official summary
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Text of the bill
I Removing tax barriers to the use of digital assets as a medium of exchange
II Providing parity between digital assets and comparable traditional financial assets
III Applying existing tax anti-abuse rules to digital assets
(a) In general. Section 954(c)(1)(B) is amended—
(1) by striking or at the end of clause (ii),
(2) by redesignating clause (iii) as clause (iv), and
(3) by inserting after clause (ii) the following new clause:
(iii) which is a digital asset, or
(b) Certain passive digital asset validation supporting income. Section 954(c)(1) is amended by adding at the end the following new subparagraphs:
(I) Certain passive digital asset validation supporting income. Income derived from staking, mining, or similar activities in support of the validation of digital asset transactions, unless—
(i) such income is derived in the active conduct of a trade or business of validating such transactions,
(ii) substantially all of the controlled foreign corporation’s digital assets are related to such trade or business, and
(iii) substantially all of the activities of such trade or business occur in the same country as the country in which such corporation is created or organized (or in the case of a qualified business unit described in section 989(a), is attributable to activities of the unit in the country in which the unit both maintains its principal office and conducts substantial business activity).
(J) Certain payments pursuant to digital asset lending agreements. In the case of an agreement described in section 1058(a) pursuant to which traded digital assets are transferred, any payment made pursuant to such agreement other than any payment described in section 1058(b)(1).
(c) Exception for dealers. Section 954(c)(2)(C) is amended—
(1) in clause (i)—
(A) by striking or (G) and inserting (G), or (I), and
(B) by striking and at the end,
(2) by striking the period at the end of clause (ii) and inserting , and, and
(3) by adding at the end the following new clause:
(iii) if such dealer is a dealer in covered digital assets (within the meaning of section 475), any interest or dividend (or equivalent amount described in subparagraph (E) or (G) of paragraph (1)) or income described in paragraph (1)(I), from any transaction (including any hedging transaction) entered into in the ordinary course of such dealer’s trade or business as such a dealer in covered digital assets, but only if the income from the transaction is attributable to activities of the dealer in the country under the laws of which the dealer is created or organized (or in the case of a qualified business unit described in section 989(a), is attributable to activities of the unit in the country in which the unit both maintains its principal office and conducts substantial business activity).
(d) Regulations. The Secretary of the Treasury shall, not later than 12 months after the date of the enactment of this Act, issue such regulations or other guidance (under the authority granted to such Secretary under section 7805 of the Internal Revenue Code of 1986) to clarify the appropriate tax treatment of certain foreign entities (and United States persons related to such entities or involved in the governance of such entities) established in connection with organizations commonly referred to as decentralized autonomous organizations, which are established in a foreign country as a foundation under foreign law (or other similar structure with a purported purpose other than profit), including—
(1) clarifying the methods by which such foreign entities may reorganize as domestic corporations under subchapter C of chapter 1 of such Code, and
(2) providing, in appropriate circumstances, temporary safe harbors to encourage such foreign entities (which were organized before the date of the introduction of this Act) to complete such reorganizations promptly after the enactment of this Act.
(e) Effective date. The amendments made by this section shall apply to taxable years of foreign corporations ending after the date of the enactment of this Act.
IV Clarifying the tax treatment of mining and staking
V Ensuring that owners and users of digital assets face an appropriate tax compliance burden
VI Definitions; regulations; rules of construction
VII Full House Act