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Representatives Max Miller of Ohio and Steven Horsford of Nevada have drafted preliminary legislation to align cryptocurrency tax treatment with traditional securities while creating exemptions for certain stablecoin transactions. The proposal, which has not been formally introduced, comes as lawmakers seek to establish clearer tax frameworks for <a href="https://yellow.com/news/trump-plans-unique-status-for-bitcoin-in-crypto-reserve-initiative" rel="noopener noreferrer nofollow">digital assets under the Trump administration</a>.
<h2 id="what-happened-legislative-draft-proposes-safe-harbor">What Happened: Legislative Draft Proposes Safe Harbor</h2>
The draft legislation would <a href="https://www.newsbtc.com/news/new-crypto-tax-proposal-bipartisan-house-duo-pushes-for-stablecoin-safe-harbor/" rel="noopener noreferrer nofollow">exempt</a> capital gains tax on transactions involving regulated stablecoins that maintain values between $0.99 and $1.01.
The exemption applies only to transactions under $200, though aides to both congressmen indicated the final text may modify which tokens qualify for the safe harbor.
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 The proposal also establishes safe harbors for rewards earned through staking, which involves verifying blockchain transactions.
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Miller stated that "America's tax code has failed to keep pace with modern financial technology," describing the bipartisan measure as a means to inject clarity, fairness and common sense into digital asset taxation.
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<h2 id="why-it-matters-industry-standards-debate">Why It Matters: Industry Standards Debate</h2>
The proposal attempts to resolve ongoing disputes over how staking and mining rewards should be taxed. Under Internal Revenue Service guidance issued during the Biden administration, staking rewards are taxed at the time of receipt, an approach Republican lawmakers argue taxes assets before owners realize gains.
Democrats maintain these rewards should be classified as compensation and taxed upon receipt.
The Miller-Horsford draft seeks compromise by allowing taxpayers to defer tax on rewards for up to five years, after which they would be taxed as income based on fair market value.
Senator Cynthia Lummis, who announced she will not seek re-election, previously introduced legislation that would leave such rewards untaxed until sold, aligning more closely with industry preferences.
The current draft also proposes including <a href="https://yellow.com/asset/btc" rel="noopener noreferrer nofollow">cryptocurrencies</a> in capital gains tax exemptions for foreign investors trading securities through U.S.-based intermediaries and would permit mark-to-market accounting for traders to recognize unrealized gains and losses based on fair market value at year end.
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Miller-Horsford Legislative Draft Seeks Capital Gains Exemption For Regulated Stablecoin Transactions Under $200

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