Possible tax exemptions for Bitcoin could be on the horizon, as proposed in a recent Senate bill.
**Current Status of Sen. Cynthia Lummis' Proposed Digital Asset Tax Legislation**
In July 2025, Senator Cynthia Lummis introduced a bill aimed at reforming the tax framework for digital assets, known informally as the Lummis Crypto Tax Bill. The legislation, which did not make it into President Donald Trump's recent budget bill, is now being pursued independently in the U.S. Senate.
The bill includes several key provisions designed to address tax concerns within the cryptocurrency sector. One of the most notable is a $300 de minimis exemption for most crypto transactions, which would exempt small transactions from capital gains tax reporting requirements. This exemption, capped at $5,000 annually, does not apply to purchases of cash or cash equivalents, stablecoins, property used in active business, or property held for income production.
Another provision of the bill aims to clarify the tax treatment of crypto mining rewards and staking. The legislation seeks to eliminate double taxation by taxing only the gains from the eventual sale of assets received through staking or mining, rather than taxing the rewards themselves upon receipt.
The Lummis Crypto Tax Bill also addresses issues such as lending, charitable giving, and dealer accounting related to digital assets. It includes provisions to expand securities lending rules to cover digital assets, making crypto lending a non-taxable event. The bill would also codify a mark-to-market election for businesses to report unrealized crypto gains on their balance sheets, and make it simpler to donate crypto to charitable causes.
According to the Congressional Joint Committee on Taxation, the bill is estimated to generate approximately $600 million in net revenue between 2025 and 2034. Sen. Lummis stated that the bill is necessary to ensure Americans can participate in the digital economy without inadvertent tax violations.
The Lummis Crypto Tax Bill is expected to further accelerate crypto's mainstream adoption as a payment method, according to crypto advocates. The bill's clarifications regarding crypto lending and staking rewards could help resolve ongoing legal disputes in the crypto industry.
As of now, an exact timeline for introducing the Lummis Crypto Tax Bill on the Senate floor has not yet been determined. However, it is expected to see a vote in the House in the coming weeks. The bill aims to offer tax-related perks for digital asset users and fulfill many of the wish list tax items for crypto policy leaders.
- Senator Cynthia Lummis proposed a bill, known as the Lummis Crypto Tax Bill, to reform the digital asset tax framework in July 2025.
- The bill includes a $300 de minimis exemption for most crypto transactions, excluding purchases of cash or cash equivalents, stablecoins, active business property, and income-producing property.
- The Lummis Crypto Tax Bill aims to clarify the tax treatment of crypto mining rewards and staking, taxing only the gains from their eventual sale.
- The bill also addresses lending, charitable giving, and dealer accounting related to digital assets, expanding securities lending rules to cover digital assets and codifying a mark-to-market election for businesses.
- The Congressional Joint Committee on Taxation estimates that the bill will generate approximately $600 million in net revenue between 2025 and 2034.
- Crypto advocates believe the bill will further accelerate crypto's mainstream adoption as a payment method and resolve ongoing legal disputes in the crypto industry, particularly regarding crypto lending and staking rewards.
- As of now, an exact timeline for introducing the Lummis Crypto Tax Bill on the Senate floor has not been determined, but it is expected to see a vote in the House in the coming weeks.
- The Lummis Crypto Tax Bill offers tax-related perks for digital asset users and fulfills many of the wish list tax items for crypto policy leaders, making it essential to ensure Americans can participate in the digital economy without inadvertent tax violations.
