,i #aai? ,,congress #b;d ,session ,h4 ,r4 #iagh ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,june #h1 #bjbf,mr4 ,yakym introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,ways & ,means ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to r$uce c]ta9 tax compliance burd5s ) respect to digital asset own]%ip1 & = o!r purposes4 #a4 ,%ort title2 etc 7a7 ,%ort title ,?is ,act may be cit$ z ! ,less ,tax ,pap]work = ,digital ,asset ,own]s ,act4 7b7 ,ref]5ces ,except z o!rwise expressly provid$1 :5ev] 9 ?is ,act an am5dm5t or repeal is express$ 9 t]ms ( an am5dm5t to1 or repeal (1 a section or o!r provision1 ! ref]5ce %all be consid]$ to be made to a section or o!r provision ( ! ,int]nal ,rev5ue ,code ( #aihf4 7c7 ,table ( cont5ts ,! table ( cont5ts = ?is ,act is z foll[s3 ,sec4 #a4 ,%ort title2 etc4 ,sec4 #b4 ,treatm5t ( de m9imis digital asset network fees4 ,sec4 #c4 ,simplifi$ acc\nt+ = ga9 & loss on widely trad$ digital assets4 ,sec4 #d4 ,treatm5t ( ,u4,s4 doll> /ableco9 transactions4 ,sec4 #e4 ,brok] requirem5ts4 ,sec4 #f4 ,def9itions4 #b4 ,treatm5t ( de m9imis digital asset network fees 7a7 ,9 g5]al ,"p ,,iii ( sub*apt] ,o ( *apt] #a ( subtitle ,a is am5d$ by ins]t+ aft] section #ajdc ! foll[+ new section3 #ajdd4 ,de m9imis network fee exception 7a7 ,9 g5]al ,no ga9 or loss %all be recogniz$ on ! disposition ( a digital asset 9 paym5t ( a de m9imis network fee4 7b7 ,de m9imis network fee ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m de m9imis network fee means an am\nt paid or incurr$ 9 a digital asset transaction to validate ano!r digital asset transaction if ! aggregate am\nt s paid or incurr$ ) respect to ! validation ( su* o!r digital asset transaction does n exce$ #aj4 7#b7 ,network fee ,! t]m network fee means any am\nt :i* w\ld be a de m9imis network fee if p>agraph 7#a7 7 appli$ )\t reg>d to ! doll> limitation specifi$ !re94 7c7 ,disposition ( digital asset us$ ,to pay network fee ,= purposes ( ?is section-- 7#a7 a disposition ( a digital asset %all n fail to be treat$ z a paym5t m]ely because su* asset is n receiv$ by ano!r p]son1 & 7#b7 any paym5t ( a network fee us+ a digital asset %all be treat$ z a disposition ( su* asset 9 ex*ange = consid]ation equal to ! fair m>ket value ( su* digital asset4 7d7 ,treatm5t ( unrecogniz$ ga9 ,! am\nt ( any network fee :i* w\ld o!rwise be tak5 into acc\nt 9 det]m9+ ! am\nt ( ga9 or loss on ! disposition ( any asset1 9 det]m9+ ! am\nt ( any d$uction1 or 9 det]m9+ ! basis ( any asset acquir$1 %all be r$uc$ by ! am\nt ( any ga9 n recogniz$ by reason ( subsection 7a7 ) respect to ! disposition ( ! digital asset us$ to pay su* network fee4 7e7 ,exclusions 7#a7 ,trade or bus9ess 7,a7 ,9 g5]al ,subsection 7a7 %all n apply to ! disposition ( a digital asset by-- 7i7 a trad]1 brok]1 or deal] 9 digital assets1 7ii7 a p]son 9 ! trade or bus9ess ( bat*+ or facilitat+ ! validation ( digital asset transactions on behalf ( o!rs1 7iii7 to ! ext5t provid$ by ! ,secret>y1 any p]son 9 a trade or bus9ess :i* is sub/antially simil> to a trade or bus9ess describ$ 9 clause 7i7 or 7ii71 or 7iv7 any p]son t engag$ 9 m ?an #e1jjj digital asset transactions dur+ ! prec$+ taxable ye>4 7,b7 ,adm9i/rative conv5i5ce exception 7i7 ,9 g5]al ,subp>agraph 7,a7 %all n apply to any taxpay] t demon/rates to ! ,secret>y t su* taxpay] is ( a type ) respect to :i* n apply+ subp>agraph 7,a7 w n result 9 a sub/antial ,f$]al rev5ue loss4 7ii7 ,guidance ,! ,secret>y %all issue guidance t-- 7,i7 id5tifies diff]5t types ( taxpay]s ) respect to :i* n apply+ subp>agraph 7,a7 w n result 9 sub/antial ,f$]al rev5ue loss1 & 7,,ii7 specifies ) respect to ea* su* type ( taxpay] ! in=mation t su* taxpay] mu/ provide to make ! demon/ration describ$ 9 clause 7i74 7iii7 ,c]ta9 factors requir$ to be tak5 into acc\nt ,! guidance issu$ by ! ,secret>y "u clause 7ii7 %all-- 7,i7 = purposes ( det]m9+ ! classification ( types ( taxpay]s1 & :e!r any ,f$]al rev5ue loss f n apply+ subp>agraph 7,a7 ) respect to any su* type ( taxpay] w\ld be sub/antial1 take into acc\nt ! me?od or me?ods us$ by su* type ( taxpay] = select+ ! digital assets us$ to pay network fees & ! av]age hold+ p]iod ( su* digital assets by su* type ( taxpay]1 & 7,,ii7 det]m9e ,f$]al rev5ue loss by r$uc+ su* loss by a reasonable approximation ( ! additional adm9i/rative co/s ( ! ,dep>tm5t ( ! ,treasury1 & ! additional compliance co/s ( su* type ( taxpay] 7& any p]son :o w\ld be requir$ to make additional in=mation return report+ ) respect to su* type ( taxpay]71 :i* w\ld be impos$ if subp>agraph 7,a7 did n apply to su* type ( taxpay]4 7#b7 ,c]ta9 acc\nt+ me?ods ,subsection 7a7 %all n apply to any digital asset-- 7,a7 to :i* section #dge1 #ajea7;a71 or #abef7;a71 or 7,b7 except z o!rwise provid$ by ! ,secret>y1 to :i* a m>k-to-m>ket me?od applies "u any o!r provision ( ?is subtitle4 7f7 ,regulations ,! ,secret>y %all issue su* regulations or o!r guidance z may be necess>y or appropriate to c>ry out ! purposes ( ?is section1 includ+ regulations or guidance to prev5t ! abuse ( ?is section ?r\gh-- 7#a7 transaction /ructur+ = ! purpose ( qualify+ = ! exclusion provid$ 9 subsection 7a71 & 7#b7 ! receipt ( any value o!r ?an ! validation ( a digital asset transaction 9 ex*ange = a network fee4 4 7b7 ,cl]ical am5dm5t ,! table ( sections = "p ,,iii ( sub*apt] ,o ( *apt] #a ( subtitle ,a is am5d$ by ins]t+ aft] ! item relat+ to section #ajdc ! foll[+ new item3 ,sec4 #ajdd4 ,de m9imis network fee exception4 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to ! disposition ( assets aft] ,decemb] #ca1 #bjbg4 #c4 ,simplifi$ acc\nt+ = ga9 & loss on widely trad$ digital assets 7a7 ,9 g5]al ,"p ,,iv ( sub*apt] ,o ( *apt] #a ( subtitle ,a is am5d$ by ins]t+ be=e section #ajeb ! foll[+ new section3 #ajea4 ,election to apply simplifi$ acc\nt+ = ga9 & loss on widely trad$ digital assets 7a7 ,9 g5]al ,9 ! case ( any designat$ type ( digital asset ) respect to any taxpay] = any taxable ye>-- 7#a7 su* taxpay] %all recognize ga9 on su* designat$ type ( digital asset = su* taxable ye> equal to ! excess 7if any7 (-- 7,a7 ! sum (-- 7i7 ! aggregate am\nt realiz$ by ! taxpay] on sales or ex*anges 7includ+ nonrecognition transactions7 ( widely trad$ digital assets ( su* designat$ type dur+ su* taxable ye>1 7ii7 9 ! case ( dispositions 7includ+ nonrecognition transactions71 o!r ?an sales or ex*ange describ$ 9 clause 7i71 ( widely trad$ digital assets ( su* designat$ type1 ! fair m>ket value ( su* widely trad$ digital assets 7det]m9$ z ( ! "t ( su* dispositions71 & 7iii7 ! fair m>ket value ( widely trad$ digital assets ( su* designat$ type held by su* taxpay] z ( ! close ( ! taxable ye>1 ov] 7,b7 ! sum (-- 7i7 ! fair m>ket value ( consid]ation provid$ by ! taxpay] = ! acquisition ( widely trad$ digital assets ( su* designat$ type dur+ ! taxable ye>1 7ii7 9 ! case ( any disposition describ$ 9 subp>agraph 7,a77ii71 any am\nts :i* w\ld h r$uc$ ! am\nt realiz$ by ! taxpay] on su* disposition if su* disposition _h be5 a sale or ex*ange1 7iii7 9 ! case ( ! acquisition ( widely trad$ digital assets ( su* designat$ type dur+ ! taxable ye> ! basis ( :i* 9 ! h&s ( ! taxpay] are det]m9$ by ref]5ce to ! basis ( su* assets 9 ! h&s ( ! transf]or1 ! basis ( su* assets 9 ! h&s ( ! taxpay] imm$iately aft] su* acquisition1 & 7iv7 ! fair m>ket value ( widely trad$ digital assets ( su* designat$ type held by su* taxpay] z ( ! close ( ! prec$+ taxable ye>1 7#b7 su* taxpay] %all recognize loss on su* designat$ type ( digital asset = su* taxable ye> equal to ! excess 7if any7 (-- 7,a7 ! am\nt describ$ 9 p>agraph 7#a77;,b71 ov] 7,b7 ! am\nt describ$ 9 p>agraph 7#a77;,a71 & 7#c7 except z provid$ 9 p>agraph 7#a7 & 7#b71 su* taxpay] %all n recognize any ga9 or loss on ! disposition ( widely trad$ digital assets ( su* designat$ type4 7b7 ,designat$ type ( digital asset ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m designat$ type ( digital asset means1 ) respect to any taxpay] = any taxable ye>1 any type ( widely trad$ digital asset ) respect to :i* su* taxpay] elects ! application ( ?is section = su* taxable ye>4 7#b7 ,type ( widely trad$ digital asset ,widely trad$ digital assets %all be treat$ z be+ ( ! same type if1 & only if-- 7,a7 su* assets are fungible1 or 7,b7 su* assets are det]m9$ "u rules provid$ by ! ,secret>y to h values t are directly l9k$ or highly correlat$4 7c7 ,ga9 or loss treat$ z %ort-,t]m ,any ga9 or loss det]m9$ "u subsection 7a7 %all be treat$ z %ort-t]m capital ga9 or %ort-t]m capital loss1 respectively4 7d7 ,treatm5t ( l5d+ transactions 7#a7 ,c]ta9 l5d+ agreem5ts ,9 ! case ( any transf] ( widely trad$ digital assets to :i* section #ajeh7;a7 applies1 su* assets %all be treat$ = purposes ( ?is section z cont9u+ to be held by ! transf]or4 7#b7 ,o!r l5d+ transactions ,9 ! case ( any loan ( widely trad$ digital assets :i* is n describ$ 9 p>agraph 7#a71 except z o!rwise provid$ by ! ,secret>y1 su* assets %all be treat$ = purposes ( ?is section z cont9u+ to be held by ! l5d]4 7e7 ,election 7#a7 ,application ( election ,an election "u ?is section ) respect to any designat$ type ( digital asset %all apply to ! fir/ taxable ye> :i* beg9s aft] ! date on :i* ! taxpay] makes su* election & to ea* taxable ye> !reaft] unless revok$ z provid$ 9 p>agraph 7#c74 7#b7 ,p>tn]%ips & ,s corporations ,9 ! case ( any p>tn]%ip or ,s corporation1 ! election "u ?is section %all be made at ! p>tn]%ip or ,s corporation level4 7#c7 ,revocation 7,a7 ,9 g5]al ,a taxpay] may revoke an election "u ?is section ) respect to a taxable ye> :i*-- 7i7 has n begun z ( ! date on :i* su* taxpay] reque/s su* revocation1 & 7ii7 is n "o ( ! fir/ #e taxable ye>s to :i* su* election applies4 7,b7 ,deem$ revocation ,9 ! case ( any designat$ type ( digital asset :i* has ceas$ to be a widely trad$ digital asset1 ! election "u ?is section ) respect to su* designat$ type %all be treat$ z revok$ ) respect to ! fir/ taxable ye> beg9n+ aft] ! date on :i* su* designat$ type ceases to be a widely trad$ digital asset4 7,c7 #e-ye> wait+ p]iod ,9 ! case ( any revocation "u ?is p>agraph ) respect to any designat$ type ( digital asset1 ! taxpay] may n make an election "u ?is section ) respect to su* designat$ type if su* election w\ld apply to any ( ! fir/ #e taxable ye>s to :i* su* revocation applies4 7,d7 ,special rule = trad]s mak+ m>k-to-m>ket election ,if a taxpay] has 9 effect "o or m elections "u ?is section ) respect to designat$ types ( digital assets & su* taxpay] makes ! election "u section #dge7;f77#c7 ) respect to any taxable ye>1 ! taxpay] %all 7not)/&+ subp>agraph 7,a77 be treat$ z revok+ all su* elections "u ?is section beg9n+ ) su* taxable ye>4 7f7 ,transition rules relat$ to election1 revocation1 & c]ta9 transf]s 7#a7 ,transition rule = election ,9 ! case ( an election "u ?is section1 ) respect to any designat$ type ( digital asset1 any widely trad$ digital assets ( su* designat$ type held by ! taxpay] %all be treat$ z sold = fair m>ket value on ! la/ day ( ! taxable ye> prec$+ ! fir/ taxable ye> to :i* su* election applies4 7#b7 ,transition rule = revocation ,9 ! case ( a revocation ( an election "u ?is section1 prop] adju/m5t %all be made 9 ! am\nt ( any ga9 or loss subsequ5tly realiz$ = ga9 or loss tak5 into acc\nt "u subsection 7a74 7#c7 ,transition rule = c]ta9 transf]s ,9 ! case ( any transf] ( a widely trad$ digital asset :i* is a designat$ type ( digital asset ) respect to ! transf]or = ! taxable ye> 9 :i* ! transf] occurs1 if ! basis ( su* asset 9 ! h&s ( ! transf]ee is det]m9$ by ref]5ce to ! basis ( su* asset 9 ! h&s ( ! transf]or1 ! basis ( su* asset 9 ! h&s ( ! transf]or 7solely = purposes ( det]m9+ ! basis ( su* asset 9 ! h&s ( ! transf]ee7 %all be treat$ z be+ equal to ! fair m>ket value ( su* asset at ! "t ( su* transf]4 7g7 ,coord9ation ) c]ta9 o!r provisions 7#a7 ,det]m9$ )\t reg>d to wa% & con/ructive sale rules ,sections #ajia & #abei %all n apply to any transaction ) respect to :i* ga9 or loss is n recogniz$ by reason ( subsection 7a77#c74 7#b7 ,coord9ation ) relat$ p>ty transaction rules ,section #bfg %all n apply ) respect to a sale or ex*ange ( prop]ty if ! transf]or has an election 9 effect "u ?is section = ! taxable ye> ) respect to su* prop]ty4 7#c7 ,nonrecognition provisions to n apply ,9 ! case ( any transf] ( a widely trad$ digital asset :i* is n a designat$ type ( digital asset ) respect to ! transf]or = ! taxable ye> ( ! transf]or 9 :i* ! transf] occurs b :i* is a designat$ type ( digital asset ) respect to ! transf]ee = ! taxable ye> ( ! transf]ee 9 :i* ! transf] occurs1 if ! transf]or & transf]ee are describ$ 9 section #bfg7;b7 7appli$ )\t reg>d to section #bfg7;c77#c77 or section #gjg7;b77#a71 ga9 or loss %all be recogniz$ on su* transf] not)/&+ any o!r provision ( ?is title4 7h7 ,cl>ification t c]ta9 transf]s are treat$ z dispositions ,! foll[+ %all n fail to be treat$ z a disposition = purposes ( ?is section3 7#a7 ,! di/ribution ( any digital asset f a tru/ to a b5efici>y4 7#b7 ,! transf] ( any digital asset f a dec$5t 7:e!r or n incid5t to ! dec$5t's dea?74 7i7 ,regulatory au?ority ,! ,secret>y %all prescribe su* regulations or o!r guidance z may be necess>y or appropriate to c>ry out ! purposes ( ?is section1 includ+ regulations or guidance relat+ to-- 7#a7 ! =m & mann] ( mak+ an election or revocation "u ?is section1 7#b7 adju/m5ts necess>y by reason ( su* election or revocation1 7#c7 adju/m5ts to report+ requirem5ts relat+ to widely trad$ digital assets ) respect to :i* an election is 9 effect "u ?is section1 7#d7 ! treatm5t ( a d]ivative ( a designat$ type ( digital asset1 & 7#e7 prev5t+ abuse ( ?is section4 4 7b7 ,cl]ical am5dm5t ,! table ( sections = "p ,,iii ( sub*apt] ,o ( *apt] #a ( subtitle ,a is am5d$ by ins]t+ be=e ! item relat+ to section #ajeb ! foll[+ new item3 ,sec4 #ajea4 ,election to apply simplifi$ acc\nt+ = ga9 & loss on widely trad$ digital assets4 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjbg4 #d4 ,treatm5t ( ,u4,s4 doll> /ableco9 transactions 7a7 ,9 g5]al ,"p ,,iv ( sub*apt] ,o ( *apt] #a ( subtitle ,a is am5d$ by r$esignat+ section #ajfc z section #ajfd & by ins]t+ aft] section #ajfb ! foll[+ new section3 #ajfc4 ,c]ta9 ,u4,s4 doll> /ableco9 transactions 7a7 ,treatm5t ( acquisitions ( ,u4,s4 doll> /ableco9s 7#a7 ,det]m9ation ( basis ,! basis ( any qualifi$ ,u4,s4 doll> /ableco9 acquir$ by a taxpay] 9 any sale or ex*ange %all be ! r$emption value ( su* /ableco94 ,! prec$+ s5t5ce %all n apply if x is unreasonable "u ! facts & circum/ances to conclude t ! value ( ! consid]ation provid$ = su* /ableco9 9 su* sale or ex*ange is n less ?an #ii4e p]c5t ( su* r$emption value4 7#b7 ,treatm5t ( consid]ation provid$ 9 ex*ange ,= purposes ( ?is title1 9 ! case ( any consid]ation o!r ?an money provid$ 9 ex*ange = a qualifi$ ,u4,s4 doll> /ableco91 ! income1 ga91 or loss result+ f ! provision ( su* consid]ation %all be det]m9$ by treat+ ! value ( su* qualifi$ ,u4,s4 doll> /ableco9 z be+ equal to ! r$emption value ( su* /ableco94 ,! prec$+ s5t5ce %all n apply if x is unreasonable "u ! facts & circum/ances to conclude t ! value ( su* /ableco9 is n less ?an #ii4e p]c5t1 & n m ?an #ajj4e p]c5t1 ( su* r$emption value4 7b7 ,treatm5t ( sale or ex*ange ( qualifi$ ,u4,s4 doll> /ableco9s 7#a7 ,det]m9ation ( ga9 or loss ,if ! taxpay]'s basis 9 any qualifi$ ,u4,s4 doll> /ableco9 0 det]m9$ "u subsection 7a77#a71 ga9 or loss on su* taxpay]'s sale or ex*ange ( su* /ableco9 %all be det]m9$ z ?\gh su* /ableco9 7 sold or ex*ang$ = ! r$emption value ( su* /ableco94 ,! prec$+ s5t5ce %all n apply if x is unreasonable "u ! facts & circum/ances to conclude t ! value ( ! consid]ation receiv$ = su* /ableco9 9 su* sale or ex*ange is n m ?an #ajj4e p]c5t ( su* r$emption value4 7#b7 ,treatm5t ( consid]ation receiv$ 9 ex*ange ,= purposes ( ?is title1 9 ! case ( any consid]ation o!r ?an money receiv$ 9 ex*ange = a qualifi$ ,u4,s4 doll> /ableco91 ! co/ ( 7& am\nt paid or incurr$ =7 su* consid]ation %all be det]m9$ by treat+ ! value ( su* qualifi$ ,u4,s4 doll> /ableco9 z be+ equal to ! r$emption value ( su* /ableco94 ,! prec$+ s5t5ce %all n apply if x is unreasonable "u ! facts & circum/ances to conclude t ! value ( su* /ableco9 is n less ?an #ii4e p]c5t1 & n m ?an #ajj4e p]c5t1 ( su* r$emption value4 7c7 ,exceptions 7#a7 ,9 g5]al ,subsections 7a7 & 7b7 %all n apply ) respect to any taxpay] = any taxable ye> if su* taxpay] is-- 7,a7 a trad]1 brok]1 or deal] 9 qualifi$ ,u4,s4 doll> /ableco9s1 7,b7 to ! ext5t provid$ by ! ,secret>y1 any p]son 9 a trade or bus9ess :i* is sub/antially simil> to a trade or bus9ess describ$ 9 subp>agraph 7,a71 or 7,c7 any o!r p]son :o 9 ! prec$+ taxable ye> engag$ 9 m ?an #e1jjj transactions to :i* subsection 7a7 or 7b7 appli$1 det]m9$ )\t reg>d to-- 7i7 any su* transaction :i* is pr$om9antly ) respect to a trade or bus9ess 7o!r ?an a trade or bus9ess describ$ 9 subp>agraph 7,a7 or 7,b771 includ+ ! acceptance ( qualifi$ ,u4,s4 doll> /ableco9s at r$emption value z a paym5t = goods or s]vices 9 su* trade or bus9ess & ! use ( qualifi$ ,u4,s4 doll> /ableco9s at r$emption value to acquire goods & s]vices = use 9 su* trade or bus9ess1 & 7ii7 any su* transaction :i* is a sale 7= money7 ( a qualifi$ ,u4,s4 doll> /ableco9 at or bel[ r$emption value4 7#b7 ,functional curr5cy o!r ?an ! doll> ,subsections 7a7 & 7b7 %all n apply to any taxpay] or qualifi$ bus9ess unit 7z def9$ 9 section #ihi7;a77 t uses a functional curr5cy o!r ?an ! doll>4 7#c7 ,relat$ p>ties ,9 ! case ( any sale or ex*ange betwe5 p]sons describ$ 9 section #bfg7;b7 7appli$ )\t reg>d to section #bfg7;c77#c77 or section #gjg7;b77#a7-- 7,a7 subsections 7a77#a71 7a77#b71 & 7b77#b7 %all be appli$ by sub/itut+ #ajj p]c5t = #ii4e p]c5t1 & 7,b7 subsections 7a77#b71 7b77#a71 & 7b77#b7 %all be appli$ by sub/itut+ #ajj p]c5t = #ajj4e p]c5t4 7d7 ,r$emption value ,= purposes ( ?is section1 ! t]m r$emption value means1 ) respect to a qualifi$ ,u4,s4 doll> /ableco91 ! doll> am\nt = :i* ! issu] is obligat$ to conv]t1 r$eem1 or repur*ase su* /ableco94 7e7 ,regulations ,! ,secret>y %all issue su* regulations or o!r guidance z may be necess>y or appropriate to c>ry out ! purposes ( ?is section1 includ+ regulations or o!r guidance-- 7#a7 describ+ ! factors consid]$1 & docum5tation or sub/antiation requir$1 ) respect to ! facts & circum/ances te/s describ$ 9 subsections 7a77#a71 7a77#b71 7b77#a71 & 7b77#b71 7#b7 provid+ = ! application ( subsection 7c77#a7 ) respect to a portion ( a taxable ye> if ! taxpay] only regul>ly pur*ases1 ex*anges1 or sells qualifi$ ,u4,s4 doll> /ableco9s = pr(it = a portion ( su* taxable ye>1 & 7#c7 to prev5t abuse ( ?is section4 4 7b7 ,cl]ical am5dm5t ,! table ( sections = "p ,,iv ( sub*apt] ,o ( *apt] #a ( subtitle ,a is am5d$ by r$esignat+ ! item relat+ to section #ajfc z an item relat+ to section #ajfd & by ins]t+ aft] ! item relat+ to section #ajfb ! foll[+ new item3 ,sec4 #ajfc4 ,c]ta9 ,u4,s4 doll> /ableco9 transactions4 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjbf4 #e4 ,brok] requirem5ts 7a7 ,9 g5]al 7#a7 ,exception = qualifi$ ,u4,s4 doll> /ableco9s acquir$ at r$emption value ,section #fjde7;g77#c77;,d7 is am5d$ to read z foll[s3 7,d7 ,specifi$ digital asset ,! t]m specifi$ digital asset means any digital asset o!r ?an a qualifi$ ,u4,s4 doll> /ableco9 ! cu/om]'s basis 9 :i* at ! "t ( acquisition is at lea/ #ii4e p]c5t ( su* /ableco9's r$emption value 7z def9$ 9 section #ajfc7;e774 4 7#b7 ,con=m+ am5dm5ts 7,a7 ,section #fjde7;c77#a77;,d7 is am5d$ by /rik+ digital assets & ins]t+ specifi$ digital assets4 7,b7 ,subp>agraph 7,b77iv7 & subp>agraph 7,c77iii7 ( section #fjde7;g77#c7 are ea* am5d$ by /rik+ digital asset & ins]t+ specifi$ digital asset4 7,c7 ,section #fjej;,i7d77#c7 is am5d$ by /rik+ 7z def9$ 9 section #fjde7;g77#c77;,d774 7b7 ,special rules = digital assets us$ ,to pay de m9imis validation fee ,section #fjde7;g7 is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#g7 ,special rules = digital assets us$ to pay de m9imis validation fee 7,a7 ,9 g5]al ,except z o!rwise provid$ by ! ,secret>y1 9 ! case ( ! disposition ( a digital asset ) respect to :i* no ga9 or loss is recogniz$ by reason ( section #ajdd7;a7-- 7i7 except z provid$ 9 clause 7ii71 subsection 7a7 %all n apply to su* disposition1 & 7ii7 ! brok] %all include 9 a return "u subsection 7a7 su* aggregate in=mation relat+ to su* dispositions ( ! taxpay] z ! ,secret>y det]m9es necess>y or appropriate1 includ+ = purposes ( v]ify+ ! taxpay]'s basis 9 digital assets held by ! taxpay]4 7,b7 ,application ( de m9imis exception ,if ! brok] has be5 notifi$ by ! taxpay] or ! ,secret>y t ! exception describ$ 9 section #ajdd7;e77#a77;,b7 applies to su* taxpay]1 ! brok] may treat su* exception z cont9u+ to apply ) respect to su* taxpay] = any cal5d> ye> 7h]eaft] 9 ?is subp>agraph ref]r$ to z ! curr5t cal5d> ye>7 unless-- 7i7 su* taxpay] _h m ?an #e1jjj digital asset transactions ) su* brok] dur+ any ( ! #e prec$+ cal5d> ye>s & ! taxpay] has n notifi$ ! brok] t su* exception applies to su* taxpay] = ! curr5t cal5d> ye>1 7ii7 su* taxpay] or ! ,secret>y notifies su* brok] t su* exception does n apply to su* taxpay]1 or 7iii7 su* brok] o!rwise kn[s1 or has reason to "k1 t su* exception does n apply to su* taxpay]4 4 7c7 ,special rules = simplifi$ acc\nt+ = widely trad$ digital assets ,section #fjde7;g71 z am5d$ by subsection 7b71 is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#h7 ,special rules = simplifi$ acc\nt+ = widely trad$ digital assets 7,a7 ,9 g5]al ,except z o!rwise provid$ by ! ,secret>y1 9 ! case ( widely trad$ digital assets ) respect to :i* an election "u section #ajea applies-- 7i7 except z provid$ 9 clause 7ii71 subsection 7a7 %all n apply to dispositions ( su* assets1 & 7ii7 ! brok] %all include 9 a return "u subsection 7a7 su* in=mation ) respect to ea* desg9at$ type ( su* assets 7)9 ! mean+ ( section #ajea7 z ! ,secret>y may provide1 includ+-- 7,i7 aggregate report+ ) respect to sales1 ex*anges1 dispositions1 & acqui/ions ( assets ( su* designat$ type 7includ+ net ga9 or loss !reon71 7,,ii7 ! fair m>ket value ( assets ( su* designat$ type held by ! taxpay] z ( ! beg9n+ & end ( ! cal5d> ye>1 & 7,,iii7 su* o!r in=mation z ! ,secret>y may require ) respect to assets ( su* designat$ type = purposes ( ! adm9i/ration ( section #ajea4 7,b7 ,det]m9ation ( election bas$ on brok] notification ,= purposes ( subp>agraph 7,a71 ! brok] %all take into acc\nt any election "u section #ajea 7& any revocation ( su* election7 if 7& only if7 ! taxpay] or ! ,secret>y notifies su* brok] ( su* election 7or revocation7 or su* brok] o!rwise kn[s1 or has reason to "k1 ( su* election 7or revocation74 4 7d7 ,effective date ,! am5dm5ts made by ?is section %all apply to returns requir$ to be fil$1 & /atem5ts requir$ to be furni%$1 aft] ,decemb] #ca1 #bjbg4 #f4 ,def9itions ,section #ggja is am5d$-- 7#a7 by r$esignat+ subsection 7p7 z subsection 7q71 & 7#b7 by ins]t+ aft] subsection 7o7 ! foll[+ new subsection3 7p7 ,def9itions relat$ to digital assets ,= purposes ( ?is title-- 7#a7 ,digital asset ,! t]m digital asset means1 except z o!rwise provid$ by ! ,secret>y1 any digital repres5tation ( value :i* is record$ on a cryptographically secur$ di/ribut$ l$g] or any simil> te*nology z specifi$ by ! ,secret>y4 7#b7 ,trad$ digital asset ,! t]m trad$ digital asset means1 except z o!rwise provid$ by ! ,secret>y to prev5t abuse1 any digital asset if-- 7,a7 su* asset is fungible1 7,b7 quotations ( su* asset are readily available on an ex*ange 7or1 9 ! case ( an ex*ange t does n provide quotations1 su* quotations are readily asc]ta9able71 & 7,c7 su* asset is ei!r-- 7i7 n a tok5iz$ digital asset1 or 7ii7 a wrapp$ digital asset ) respect to :i* ! ref]5ce digital asset is a trad$ digital asset4 7#c7 ,widely trad$ digital asset 7,a7 ,9 g5]al ,! t]m widely trad$ digital asset means1 ) respect to any taxpay] = any taxable ye> & except z o!rwise provid$ by ! ,secret>y to prev5t abuse1 any trad$ digital asset if-- 7i7 quotations = su* asset 7 readily available on an ex*ange = ! entire cal5d> ye> :i* ends 9 or ) ! taxable ye> prec$+ su* taxable ye>1 7ii7 ! m>ket capitalization ( su* asset exce$$ #ejj1jjj1jjj at sub/antially all times dur+ su* cal5d> ye>1 & 7iii7 n m ?an #aj p]c5t ( ! units ( su* asset 7 own$1 directly or indirectly1 by ! taxpay] or any p]son describ$ ) respect to ! taxpay] "u section #bfg7;b7 7appli$ )\t reg>d to section #bfg7;c77#c77 or section #gjg7;b77#a7 at any "t dur+ su* taxable ye> or su* prec$+ taxable ye>4 7,b7 ,special rule = wrapp$ digital assets ,9 ! case ( any wrapp$ digital asset1 except z o!rwise provid$ by ! ,secret>y to prev5t abuse1 su* asset %all be treat$ z a widely trad$ digital asset if1 & only if1 ! ref]5ce digital asset ) respect to su* wrapp$ digital asset is a widely trad$ digital asset4 7,c7 ,au?ority to ensure reliable price discov]y ,= purposes ( subp>agraphs 7,a7 & 7,b71 ! t]m prev5t abuse includes ! exclusion ( assets t lack reliable price discov]y or t ! ,secret>y det]m9es are at risk ( price manipulation4 7,d7 ,au?ority to adju/ requirem5ts ,! ,secret>y may1 by regulation1 provide requirem5ts t apply 9 lieu ( "o or m ( ! requirem5ts ( clauses 7i7 ?r\gh 7iii7 ( subp>agraph 7,a7 if ! ,secret>y det]m9es t due to *anges 9 m>ket conditions 7includ+ by reason ( ! enactm5t ( ,f$]al digital asset m>ket /ructure legislation7 t su* alt]native requirem5ts w\ld m effectively or effici5tly id5tify trad$ digital assets = :i* !re is consi/5t & reliable price discov]y4 7,e7 ,inflation adju/m5t ,9 ! case ( any cal5d> ye> aft] #bjbg1 ! #ejj1jjj1jjj am\nt 9 subp>agraph 7,a77ii7 %all be increas$ by an am\nt equal to-- 7i7 su* doll> am\nt1 multipli$ by 7ii7 ! co/-(-liv+ adju/m5t det]m9$ "u section #a7;f77#c7 = su* cal5d> ye>1 det]m9$ by sub/itut+ cal5d> ye> #bjbf = cal5d> ye> #bjaf 9 subp>agraph 7,a77ii7 !re(4 ,any increase det]m9$ "u ! prec$+ s5t5ce :i* is n a multiple ( #ajj1jjj %all be r\nd$ to ! ne>e/ multiple ( #ajj1jjj4 7#d7 ,tok5iz$ digital asset ,! t]m tok5iz$ digital asset means any digital asset 7o!r ?an any qualifi$ ,u4,s4 doll> /ableco97 if m ?an an insignificant portion ( ! value ( su* digital asset is relat$ to any?+ o!r ?an ! op]ation ( ! cryptographically secur$ di/ribut$ l$g] on :i* su* digital asset is record$4 7#e7 ,wrapp$ digital asset ,! t]m wrapp$ digital asset means1 except z o!rwise provid$ by ! ,secret>y to prev5t abuse1 any digital asset if su* asset-- 7,a7 is r$eemable on dem&1 on a "o-=-"o basis1 = ano!r digital asset1 & 7,b7 is record$ on a cryptographically secur$ di/ribut$ l$g] o!r ?an ! cryptographically secur$ di/ribut$ l$g] on :i* ! digital asset ref]r$ to 9 subp>agraph 7,a7 is record$4 7#f7 ,ref]5ce digital asset 7,a7 ,9 g5]al ,! t]m ref]5ce digital asset means1 ) respect to any wrapp$ digital asset1 ! digital asset ref]r$ to 9 p>agraph 7#e77;,a74 7,b7 ,special rule = rewrapp+s ,if1 b = ?is subp>agraph1 ! ref]5ce digital asset ) respect to any wrapp$ digital asset w\ld be a wrapp$ digital asset 7h]eaft] ref]r$ to 9 ?is p>agraph z ! l[]-ti] wrapp$ digital asset7-- 7i7 subp>agraph 7,a7 %all be appli$ ) respect to su* l[]-ti] wrapp$ digital asset1 & 7ii7 ! ref]5ce digital asset ) respect to su* l[]-ti] wrapp$ digital asset %all be treat$ z ! ref]5ce digital asset ( su* wrapp$ digital asset4 7,c7 ,multiple wrapp+s ,if1 aft] ! application ( subp>agraph 7,b71 ! ref]5ce digital asset ) respect to ! l[]-ti] wrapp$ digital asset is a wrapp$ digital asset1 su* subp>agraph %all be reappli$ by treat+ su* l[]-ti] wrapp$ digital asset z ! wrapp$ digital asset4 7#g7 ,/ableco9 7,a7 ,qualifi$ ,u4,s4 doll> /ableco9 ,! t]m qualifi$ ,u4,s4 doll> /ableco9 means any ,u4,s4 doll> /ableco9 :i* is issu$ by-- 7i7 a p]mitt$ paym5t /ableco9 issu] 7z def9$ 9 section #b7bc7 ( ! ,,g5ius ,act1 z 9 effect on ! date ( ! enactm5t ( ?is p>agraph71 or 7ii7 a =eign paym5t /ableco9 issu] 7z def9$ 9 section #b7ab7 ( ! ,,g5ius ,act1 z s 9 effect7 :i* is p]mitt$ "u su* ,act 7z s 9 effect7 to (f]1 sell1 or o!rwise make available su* ,u4,s4 doll> /ableco9 9 ! ,unit$ ,/ates4 7,b7 ,u4,s4 doll> /ableco9 ,! t]m ,u4,s4 doll> /ableco9 means a paym5t /ableco9 z def9$ 9 section #b7bb7 ( ! ,,g5ius ,act 7z 9 effect on ! date ( ! enactm5t ( ?is p>agraph7 appli$ by sub/itut+ doll>s = monet>y value ea* place x appe>s 9 su* section4 7,c7 ,publication ( li/ ,! ,secret>y %all1 to ! ext5t feasible1 regul>ly publi% a li/ ( qualifi$ ,u4,s4 doll> /ableco9s4 7,d7 ,limit$ au?ority to treat /ableco9s z money ,! ,secret>y may issue su* regulations or o!r guidance z may be necess>y or appropriate to 7except z o!rwise expressly provid$ 9 ?is title7-- 7i7 treat qualifi$ ,u4,s4 doll> /ableco9s z doll>s1 & 7ii7 treat o!r /ableco9s z curr5cy if su* treatm5t w\ld increase ,f$]al rev5ues4 7#h7 ,digital asset transaction ,! t]m digital asset transaction means any transf] ( a digital asset record$ on ! cryptographically secur$ di/ribut$ l$g] 7or simil> te*nology7 ref]r$ to 9 p>agraph 7#a74 7#i7 ,validation ,! t]m validate1 & any d]ivative ( su* t]m 7includ+ validation71 :5 us$ 9 connection ) a digital asset transaction1 includes ! processes ( propos+ transactions = validation & v]ify+ ! validation ( transactions4 4