PAR Act

This bill, known as the PAR Act, updates the Internal Revenue Code to provide clearer tax rules for digital assets, specifically targeting lenders, dealers, traders, and investors. It primarily affects individuals and businesses involved in lending traded digital assets, dealers and traders of widely traded digital assets, and taxpayers engaging in digital asset trading activities. A key provision requires lenders to report transfers of traded digital assets similarly to how they report securities, while also allowing dealers and traders to elect a "mark-to-market" accounting method to calculate gains and losses on these assets. The legislation further establishes a safe harbor for digital asset trading and defines specific terms such as "widely traded digital asset" based on market capitalization and liquidity thresholds. Finally, the bill includes definitions for various digital asset types, including stablecoins, and clarifies that these rules do not determine whether a digital asset is legally classified as a security or commodity.