Tax Impacts

On July 30, President Trump’s Working Group on Digital Assets released its comprehensive “Strengthening American Leadership in Digital Financial Technology” report (the Report). The 160-plus-page report sets forth a series of recommendations seeking to “ensure crypto becomes a hallmark of the new American Golden Age” while outlining a proposed framework for regulating digital assets. A key section of the Report focuses on the taxation of digital assets and sets forth proposals on the modernization of the tax framework to better align with the realities of the digital asset ecosystem. The proposals address a range of substantive tax issues, including the classification of digital assets for tax purposes, the timing and character of income from mining and staking activities, and the tax treatment of stablecoins, and also recommends updates to taxpayer and third-party reporting requirements.