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House bill would clarify tax rules for crypto trading
Rep. David Kustoff’s PAR Act would fold traded digital assets into existing rules for lending, dealer treatment and a trading safe harbor.
For crypto traders, the hard part is often not buying or selling a coin. It is knowing which tax rule applies once a trade, loan or market-making arrangement is complete. A proposal in the U.S. House from Tennessee Republican Rep. David Kustoff would try to make that picture cleaner by bringing digital assets into parts of the Internal Revenue Code of 1986 that already govern securities.
The bill is called the Providing Analogous Rules for Digital Assets Act, or PAR Act. Rather than creating a separate crypto tax system, it would adapt familiar rules so certain digital-asset transactions fit a framework tax professionals already know how to read.
Lending in crypto's old frame
One part of the bill would update Section 1058, the lending rule for securities, so it applies to “specified assets” instead. That new category would include traded digital assets alongside securities. For lenders and borrowers, the change is meant to make digital-asset lending look more like ordinary securities lending, with clearer treatment for what changes hands and what comes back.
The bill also reaches dealers and traders in widely traded digital assets. It would extend mark-to-market accounting, which treats assets as if they were sold at year-end, so gains and losses show up in a more predictable way. A separate trading safe harbor would give some routine activity a clearer lane through the tax code instead of leaving it to be sorted out one transaction at a time.
Where the bill draws its boundaries
The proposal does not stop at broad labels. It defines digital asset, traded digital asset, widely traded digital asset, tokenized digital asset, wrapped digital asset and stablecoin, and it sets a $500 million market-cap threshold for some widely traded assets before inflation adjustments after 2027.
It also includes rules of construction meant to keep the tax changes from being read as a verdict on other parts of law. The bill says its language should not be taken to decide whether a digital asset is a security, commodity, debt, equity, stock or partnership interest under other statutes. For traders, lenders and the tax advisers who work around them, that is the practical point: clearer tax treatment, without pretending the rest of the legal fight is settled.