U.S. Senator Proposes Standalone Crypto Tax Relief Bill After Exclusion from Budget Package

Senator Cynthia Lummis has introduced legislation to address key pain points in cryptocurrency taxation after her proposals were omitted from President Trump's budget bill. The bill would exempt transactions under $300 from capital gains reporting—capped at $5,000 annually—and eliminate double taxation on staking rewards, mining income, and fork/airdrop assets.

The Wyoming Republican's proposal tackles several industry grievances, including wash sale rules and charitable donations of digital assets. "We cannot allow archaic tax policies to stifle American innovation," Lummis stated, positioning the bill as necessary infrastructure for mainstream crypto adoption.

Market participants note the legislation faces uncertain prospects in a divided Senate, though its introduction signals growing political recognition of crypto's unique accounting challenges. The bill WOULD allow traders to use mark-to-market accounting and defer tax liability until asset disposition.