Nonrecognition of gain or loss on certain sales, exchanges, or dispositions of stablecoins

(a) In general Part III of subchapter O of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 1033 the following new section: 1034. Certain sales, exchanges, or dispositions of stablecoins (a) In general No gain or loss shall be recognized on the sale, exchange, or disposition of covered payment stablecoins to purchase products or services. (b) Definitions (1) Covered payment stablecoin The term covered payment stablecoin means a qualified U.S. dollar stablecoin which— (A) was identified in the most recent report published by the Secretary under paragraph (2) before the sale, exchange, or disposition of such stablecoin, and (B) was acquired by the taxpayer at a price within 3 percent of $1.00. (2) Identification by Treasury Not less frequently than every 3 months, the Secretary shall make publicly available a report identifying each qualified U.S. dollar stablecoin that, during the 12-month period ending on the last day of the preceding month, was actively traded at a price within 3 percent of $1.00. (c) Exclusions (1) Trade or business Subsection (a) shall not apply to the sale, exchange, or disposition of a covered payment stablecoin by— (A) a trader, broker, or dealer in qualified U.S. dollar stablecoins, or (B) to the extent provided by the Secretary, any person in a trade or business which is substantially similar to a trade or business described in subparagraph (A). (2) Functional currency other than U.S. dollar Subsection (a) shall not apply to any taxpayer or qualified business unit (as defined in section 989(a)) that uses a functional currency (as defined in section 985(b)) other than the dollar. (d) Books and records In such form and manner as the Secretary may prescribe, a taxpayer shall maintain books and records sufficient to distinguish sales, exchanges, or dispositions of covered payment stablecoins eligible for nonrecognition under subsection (a) from transactions which are not eligible under such subsection. (e) Regulations and guidance The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including— (1) requirements relating to recordkeeping and broker information reporting, and (2) allocation of basis and characterization of the asset and any gain or loss.. (b) Exemption from information reporting Section 6045 of such Code is amended by adding at the end the following new subsection: (i) Exemption for certain digital asset transactions (1) Covered payment stablecoins In the case of the sale, exchange, or disposition of any covered payment stablecoin for which no gain or loss is recognized under section 1034(a), no return shall be required under subsection (a). (2) Regulations The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out this subsection, including rules under which a broker— (A) may rely on information or certifications provided by a customer for purposes of determining whether any applicable requirements under section 1034 have been satisfied, (B) shall not be required to determine whether the requirement under section 1034(b)(1)(B) has been satisfied with respect to a qualified U.S. dollar stablecoin if the acquisition of such qualified U.S. dollar stablecoin was not effected by such broker, and (C) shall not be required to determine any fact that is not known or reasonably available to such broker.. (c) Clerical amendment The table of sections for part III of subchapter O of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 1033 the following new item: Sec. 1034. Certain sales, exchanges, or dispositions of stablecoins.. (d) Effective date The amendments made by this section shall apply with respect to transactions entered into after December 31, 2026.