Sponsor
Jodey Cook Arrington
Representative · R-TX
Representative · R-TX
Official title: To amend the Internal Revenue Code of 1986 to apply the wash sale rules and constructive sale rules to digital assets, and for other purposes.
Introduced June 8, 2026 by Jodey Cook Arrington · Last progress June 8, 2026
The bill increases tax clarity and closes avoidance paths for crypto by extending existing rules to digital assets and defining key terms, but it also imposes new compliance burdens, can create immediate taxable events and higher tax bills for some holders/traders, and leaves unresolved regulatory classification questions.
Taxpayers: the bill extends the wash-sale rule to digital assets, reducing opportunities to claim artificial losses from near-identical crypto trades and improving tax integrity.
Taxpayers and financial institutions: the bill provides clearer, statutory definitions and reporting rules (including 'specified assets' and 'widely traded' criteria) and authorizes a stablecoin list, reducing long‑running tax uncertainty and making reporting/withholding decisions more predictable.
Validators/miners and those earning staking rewards: digital assets received as validation/consensus rewards are exempted from the wash-sale rule, avoiding unintended disallowance of losses tied to staking-type rewards.
Digital-asset traders and many taxpayers: the bill widens wash‑sale restrictions to most digital assets (excluding some qualified U.S. dollar stablecoins), likely disallowing common tax loss‑harvesting trades and increasing tax liabilities for frequent traders.
Brokers and financial institutions: firms will face substantial compliance, reporting, and systems costs to update platforms, track transfers across wrapped/tokenized representations, and apply new identity/equivalence rules.
Holders of tokenized versions of securities: some positions may be treated as immediate constructive sales, generating unexpected taxable events and cash tax liabilities.
Based on analysis of 5 sections of legislative text.
Expands wash‑sale and constructive‑sale tax rules to cover most digital assets, defines key crypto terms, and narrows stablecoin treatment for non‑dollar taxpayers.
Expands existing federal tax anti-abuse rules to cover most digital assets. The bill changes the wash-sale rule and the constructive sale rule to treat many cryptocurrencies and tokenized assets like traditional securities for tax purposes, defines key digital-asset terms in the tax code, limits qualified U.S. dollar stablecoin treatment for taxpayers with non‑dollar functional currencies, and includes a broker-reporting transition rule through January 1, 2028.