Sponsors
11 Republican
Jodey ArringtonTX-19
This legislation amends the Internal Revenue Code to apply wash sale and constructive sale rules to digital assets, closing tax loopholes that currently allow investors to immediately repurchase sold assets. The bill excludes qualified U.S. dollar stablecoins from these rules and provides a specific exception for digital assets acquired through transaction validation activities, such as mining and staking. It also establishes standardized definitions for digital assets, wrapped assets, and stablecoins.
The bill extends standard tax anti-abuse rules to the crypto industry, placing digital assets on a similar tax footing as traditional stocks and securities. This means investors will no longer be able to claim tax losses on crypto sales if they buy back a substantially identical asset within 30 days, which increases tax compliance complexity and limits tax-loss harvesting strategies for traders. However, the legislation provides key wins for the crypto ecosystem by offering regulatory and tax clarity. By explicitly exempting qualified U.S. dollar stablecoins from wash and constructive sale rules, it acknowledges their utility as payment instruments. Furthermore, the exclusion of block rewards from validator activities (mining and staking) protects network participants from unintended tax liabilities. Crucially, the bill includes a rule of construction specifying that these tax changes do not influence whether a digital asset is classified as a security or commodity under other federal laws. While it introduces new tax limitations, its balanced approach, support for stablecoins, and protections for validators make it a standard compliance measure.
Every member who has sponsored, cosponsored or voted on this bill. Pick a vote to see how each member voted on it, or narrow by party, name or state.
1 Republican