Digital Asset Tax Certainty Act

1063. Certain U.S. dollar stablecoin transactions

(a) Treatment of acquisitions of U.S. dollar stablecoins

(1) Determination of basis. The basis of any qualified U.S. dollar stablecoin acquired by a taxpayer in any sale or exchange shall be the redemption value of such stablecoin. The preceding sentence shall not apply if it is unreasonable under the facts and circumstances to conclude that the value of the consideration provided for such stablecoin in such sale or exchange is not less than 99.5 percent of such redemption value.

(2) Treatment of consideration provided in exchange. For purposes of this title, in the case of any consideration other than money provided in exchange for a qualified U.S. dollar stablecoin, the income, gain, or loss resulting from the provision of such consideration shall be determined by treating the value of such qualified U.S. dollar stablecoin as being equal to the redemption value of such stablecoin. The preceding sentence shall not apply if it is unreasonable under the facts and circumstances to conclude that the value of such stablecoin is not less than 99.5 percent, and not more than 100.5 percent, of such redemption value.

(b) Treatment of sale or exchange of qualified U.S. dollar stablecoins

(1) Determination of gain or loss. If the taxpayer’s basis in any qualified U.S. dollar stablecoin was determined under subsection (a)(1), gain or loss on such taxpayer’s sale or exchange of such stablecoin shall be determined as though such stablecoin were sold or exchanged for the redemption value of such stablecoin. The preceding sentence shall not apply if it is unreasonable under the facts and circumstances to conclude that the value of the consideration received for such stablecoin in such sale or exchange is not more than 100.5 percent of such redemption value.

(2) Treatment of consideration received in exchange. For purposes of this title, in the case of any consideration other than money received in exchange for a qualified U.S. dollar stablecoin, the cost of (and amount paid or incurred for) such consideration shall be determined by treating the value of such qualified U.S. dollar stablecoin as being equal to the redemption value of such stablecoin. The preceding sentence shall not apply if it is unreasonable under the facts and circumstances to conclude that the value of such stablecoin is not less than 99.5 percent, and not more than 100.5 percent, of such redemption value.

(c) Exceptions

(1) In general. Subsections (a) and (b) shall not apply with respect to any taxpayer for any taxable year if such taxpayer is—

(A) a trader, broker, or dealer in qualified U.S. dollar stablecoins,

(B) to the extent provided by the Secretary, any person in a trade or business which is substantially similar to a trade or business described in subparagraph (A), or

(C) any other person who in the preceding taxable year engaged in more than 5,000 transactions to which subsection (a) or (b) applied, determined without regard to—

(i) any such transaction which is with respect to a trade or business (other than a trade or business described in subparagraph (A) or (B)), including the acceptance of qualified U.S. dollar stablecoins at redemption value as a payment for goods or services in such trade or business and the use of qualified U.S. dollar stablecoins at redemption value to acquire goods and services for use in such trade or business, and

(ii) any such transaction which is a sale (for money) of a qualified U.S. dollar stablecoin at or below redemption value.

(2) Functional currency other than the dollar. Subsections (a) and (b) shall not apply to any taxpayer or qualified business unit (as defined in section 989(a)) that uses a functional currency other than the dollar.

(3) Related parties. In the case of any sale or exchange between persons described in section 267(b) (applied without regard to section 267(c)(3)) or section 707(b)(1)—

(A) subsections (a)(1), (a)(2), and (b)(2) shall be applied by substituting 100 percent for 99.5 percent, and

(B) subsections (a)(2), (b)(1), and (b)(2) shall be applied by substituting 100 percent for 100.5 percent.

(d) Redemption value. For purposes of this section, the term redemption value means, with respect to a qualified U.S. dollar stablecoin, the dollar amount for which the issuer is obligated to convert, redeem, or repurchase such stablecoin.

(e) Regulations. The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including regulations or other guidance—

(1) describing the factors considered, and documentation or substantiation required, with respect to the facts and circumstances tests described in subsections (a)(1), (a)(2), (b)(1), and (b)(2),

(2) providing for the application of subsection (c)(1) with respect to a portion of a taxable year if the taxpayer only regularly purchases, exchanges, or sells qualified U.S. dollar stablecoins for profit for a portion of such taxable year, and

(3) to prevent abuse of this section.

Sec. 1063. Certain U.S. dollar stablecoin transactions.