De minimis gain or loss from sale, exchange, or disposition of digital assets

(a) In general Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139I the following new section: 139J. De minimis gain or loss from sale, exchange, or disposition of digital assets (a) In general Subject to subsection (b), gross income shall not include gain or loss from the sale, exchange, or disposition of digital assets to purchase products or services in a personal transaction (consistent with section 988(e)(3)), unless the sale, exchange, or disposition is for— (1) cash or cash equivalents, or (2) other digital assets. (b) Limitation (1) In general Subsection (a) shall not apply in the case of any sale, exchange, or disposition for which— (A) the total value of such sale, exchange, or disposition exceeds $300, or (B) the total loss which would otherwise be recognized with respect to such sale, exchange, or disposition exceeds $300. (2) Aggregation rule For purposes of this subsection, all sales, exchanges, or dispositions which are part of the same transaction (or a series of related transactions) shall be treated as one sale, exchange, or disposition. (3) Total gains If, after applying subsection (a) to a transaction, the taxpayer’s total gain for the taxable year from transactions described in subsection (a) exceeds $5,000, no further exclusion shall apply for such year. (c) Basis Except as otherwise provided by the Secretary, subsection (a) shall not apply to a sale, exchange, or disposition of digital assets for which the principal purpose of such sale, exchange, or disposition is to eliminate gains. (d) Books and records A taxpayer shall maintain books and records or separate wallets or accounts (as determined by the Secretary) which distinguish between sales, exchanges, or dispositions of digital assets eligible for the exclusion from gross income under subsection (a) and sales, exchanges, or dispositions which are not eligible for the exclusion. (e) Inflation adjustment (1) In general In the case of any taxable year beginning in a calendar year after 2026, each dollar amount in subsection (b)(1) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2025 for calendar year 2016 in subparagraph (A)(ii) thereof. (2) Rounding Any increase determined under paragraph (1) shall be rounded to the nearest multiple of $10. (f) Regulations and guidance The Secretary may prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including— (1) requirements relating to recordkeeping and broker information reporting, (2) anti-abuse standards which are consistent with the purposes of this section, which may include defining related transactions to avoid unintended application of the exclusion from gross income under subsection (a), (3) allocation of basis and characterization of appreciation, and (4) treatment of mixed transactions which contain both goods or services and property described in paragraph (1), (2), or (3) of subsection (a). (g) Termination This section shall not apply to taxable years beginning after December 31, 2035.. (b) Clerical amendment The table of sections for part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 139I the following new item: Sec. 139J. De minimis gain or loss from sale, exchange, or disposition of digital assets.. (c) Effective date The amendments made by this section shall apply with respect to transactions entered into after December 31, 2025.