Senate tax bill frees stablecoin spending while Bitcoin stays on IRS forms

A coffee bought with a qualifying dollar stablecoin would avoid gain-or-loss recognition under the ADAPT Act that Sen. Steve Daines released Sept. 30. The same coffee bought with Bitcoin would still trigger the cost-basis calculation and capital gain or loss reporting that attach to spending digital assets.Bloomberg Law reported Sept. 25 that Daines had circulated a draft and expected to introduce it the next week. The 56-page text released Sept. 30 carries the title Aligning Digital Assets with Principles of Taxation Act and lists Sens. Cynthia Lummis, Bernie Moreno and Tim Scott of South Carolina as cosponsors.Under current IRS guidance, paying for goods or services with digital assets in any amount is a disposition. Holders of personal or investment assets must calculate and report capital gain or loss, which depends on the asset's value and cost basis.A payment can produce a gain, a loss, or a break-even result, and the IRS uses a cup of coffee as its own example. A $5 Bitcoin purchase with an allocated basis of $3 produces a $2 capital gain that belongs on the return.What qualifies as a covered stablecoinNew section 1034 of the tax code would treat the disposition of covered p...