HouseH.R. 9172119th Congress
Applying Existing Tax Anti-Abuse Rules to Digital Assets Act
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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9172 Introduced in House (IH)]
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119th CONGRESS
2d Session
H. R. 9172
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.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 8, 2026
Mr. Arrington introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Applying Existing
Tax Anti-Abuse Rules to Digital Assets Act''.
(b) References.--Except as otherwise expressly provided, whenever
in this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provision of the
Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; etc.
Sec. 2. Application of wash sale rules to digital assets.
Sec. 3. Application of constructive sale rules to digital assets.
Sec. 4. Definitions.
Sec. 5. Rules of construction.
SEC. 2. APPLICATION OF WASH SALE RULES TO DIGITAL ASSETS.
(a) In General.--Section 1091 is amended--
(1) by striking ``stock or securities'' each place it
appears and inserting ``specified assets'', and
(2) by striking ``shares of'' each place it appears.
(b) Specified Asset.--Section 1091 is amended by adding at the end
the following new subsection:
``(g) Specified Asset.--For purposes of this section--
``(1) In general.--The term `specified asset' means--
``(A) any stock or security, and
``(B) any digital asset other than a qualified U.S.
dollar stablecoin.
``(2) Contracts and options.--Except as otherwise provided
in regulations, the term `specified asset' includes any
contract or option to acquire or sell any specified asset
described in paragraph (1).
``(3) Treatment of tokenized digital assets as
substantially identical to an economically equivalent stock or
security.--A tokenized digital asset (and a wrapped digital
asset with respect to which the reference digital asset is a
traded digital asset) shall be treated as substantially
identical to any stock, security, or digital asset if such
tokenized digital asset (or such wrapped digital asset) is
economically equivalent to such stock, security, or digital
asset.
``(4) Functional currency other than the dollar.--In the
case of any taxpayer or qualified business unit (as defined in
section 989(a)), a qualified U.S. dollar stablecoin shall not
be treated as a qualified U.S. dollar stablecoin for purposes
of paragraph (1)(B) if such taxpayer or qualified business unit
uses a functional currency other than the dollar.''.
(c) Exception for Certain Acquisitions of Digital Assets Acquired
in Connection With Validation of Digital Asset Transactions.--Section
1091, as amended by subsection (b), is amended by adding at the end the
following new subsection:
``(h) Exception for Certain Acquisitions of Digital Assets Acquired
in Connection With the Validation of Digital Asset Transactions.--The
acquisition of a digital asset shall not be taken into account under
this section if such digital asset is acquired in connection with the
validation of digital asset transactions (including digital asset
validation supporting activities).''.
(d) Conforming Amendments.--
(1) Section 1091(a) is amended by striking the last
sentence.
(2) Section 1091(e) (as amended by subsection (a)) is
amended to read as follows:
``(e) Certain Short Sales of Specified Assets and Specified Asset
Futures Contracts To Sell.--Rules similar to the rules of subsection
(a) shall apply to any loss realized on the closing of a short sale of
(or the sale, exchange, or termination of a specified asset futures
contract to sell) specified assets if, within a period beginning 30
days before the date of such closing and ending 30 days after such
date--
``(1) substantially identical specified assets were sold,
or
``(2) another short sale of (or specified asset futures
contracts to sell) substantially identical specified assets was
entered into.
For purposes of this subsection, the term ``specified asset futures
contract'' has the meaning provided by section 1234B(c).''.
(3) The heading of section 1091 is amended by striking
``stock or securities'' and inserting ``specified assets''.
(4) The headings of subsections (b), (c), and (d) of
section 1091 are each amended by striking ``Stock'' each place
it appears and inserting ``Specified Assets''.
(5) The item relating to section 1091 in the table of
sections for part VII of subchapter O of chapter 1 is amended
by striking ``stock or securities'' and inserting ``specified
assets''.
(6) Section 312(f)(1) is amended by striking ``stock or
securities'' and inserting ``specified assets''.
(7) Section 1256(f)(5) is amended by striking ``stock or
securities'' and inserting ``specified assets''.
(8) Section 6045(g)(2)(B)(ii) is amended--
(A) by striking ``stock or securities'' and
inserting ``specified assets'', and
(B) by striking ``identical securities'' and
inserting ``identical specified assets''.
(e) Effective Date.--The amendments made by this section shall
apply to dispositions after the date of the introduction of this Act.
(f) Transition Rule Relating to Broker Reporting.--For purposes of
section 6045 of the Internal Revenue Code of 1986, in the case of the
sale or other disposition before January 1, 2028, of a digital asset to
which section 1091 would not have applied but for the amendments made
by this section, the customer's adjusted basis may be determined
without regard to section 1091 of such Code.
SEC. 3. APPLICATION OF CONSTRUCTIVE SALE RULES TO DIGITAL ASSETS.
(a) In General.--Section 1259(b)(1) is amended by inserting ``,
digital asset (other than a qualified U.S. dollar stablecoin)'' after
``debt instrument''.
(b) Application of Exception for Sales of Nonpublicly Traded
Property.--Section 1259(c)(2) is amended by inserting ``or widely
traded digital asset'' after ``marketable security (as defined in
section 453(f))''.
(c) Treatment of Tokenized Digital Assets as Substantially
Identical to Economically Equivalent Financial Property.--Section
1259(c) is amended by adding at the end the following new paragraph:
``(5) Treatment of tokenized digital assets as
substantially identical to economically equivalent financial
property.--A tokenized digital asset shall be treated as
substantially identical to any stock, debt instrument, or
partnership interest if such tokenized digital asset is
economically equivalent to such stock, debt instrument, or
partnership interest.''.
(d) Functional Currency Other Than the Dollar.--Section 1259(e) is
amended by adding at the end the following new paragraph:
``(4) Qualified u.s. dollar stablecoins and functional
currency other than the dollar.--In the case of any taxpayer or
qualified business unit (as defined in section 989(a)), a
qualified U.S. dollar stablecoin (determined without regard to
this paragraph) shall not be treated as a qualified U.S. dollar
stablecoin for purposes of this section if such taxpayer or
qualified business unit uses a functional currency other than
the dollar.''.
(e) Effective Date.--The amendments made by this section shall
apply to constructive sales after the date of the introduction of this
Act.
SEC. 4. DEFINITIONS.
Section 7701 is amended--
(1) by redesignating subsection (p) as subsection (q), and
(2) by inserting after subsection (o) the following new
subsection:
``(p) Definitions Related to Digital Assets.--For purposes of this
title--
``(1) Digital asset.--The term `digital asset' means,
except as otherwise provided by the Secretary, any digital
representation of value which is recorded on a
cryptographically secured distributed ledger or any similar
technology as specified by the Secretary.
``(2) Traded digital asset.--The term `traded digital
asset' means, except as otherwise provided by the Secretary to
prevent abuse, any digital asset if--
``(A) such asset is fungible,
``(B) quotations of such asset are readily
available on an exchange (or, in the case of an
exchange that does not provide quotations, such
quotations are readily ascertainable), and
``(C) such asset is either--
``(i) not a tokenized digital asset, or
``(ii) a wrapped digital asset with respect
to which the reference digital asset is a
traded digital asset.
``(3) Widely traded digital asset.--
``(A) In general.--The term `widely traded digital
asset' means, with respect to any taxpayer for any
taxable year and except as otherwise provided by the
Secretary to prevent abuse, any traded digital asset
if--
``(i) quotations for such asset were
readily available on an exchange for the entire
calendar year which ends in or with the taxable
year preceding such taxable year,
``(ii) the market capitalization of such
asset exceeded $500,000,000 at substantially
all times during such calendar year, and
``(iii) not more than 10 percent of the
units of such asset were owned, directly or
indirectly, by the taxpayer or any person
described with respect to the taxpayer under
section 267(b) (applied without regard to
section 267(c)(3)) or section 707(b)(1) at any
time during such taxable year or such preceding
taxable year.
``(B) Special rule for wrapped digital assets.--In
the case of any wrapped digital asset, except as
otherwise provided by the Secretary to prevent abuse,
such asset shall be treated as a widely traded digital
asset if, and only if, the reference digital asset with
respect to such wrapped digital asset is a widely
traded digital asset.
``(C) Authority to ensure reliable price
discovery.--For purposes of subparagraphs (A) and (B),
the term `prevent abuse' includes the exclusion of
assets that lack reliable price discovery or that the
Secretary determines are at risk of price manipulation.
``(D) Authority to adjust requirements.--The
Secretary may, by regulation, provide requirements that
apply in lieu of one or more of the requirements of
clauses (i) through (iii) of subparagraph (A) if the
Secretary determines that due to changes in market
conditions (including by reason of the enactment of
Federal digital asset market structure legislation)
that such alternative requirements would more
effectively or efficiently identify traded digital
assets for which there is consistent and reliable price
discovery.
``(E) Inflation adjustment.--In the case of any
calendar year after 2027, the $500,000,000 amount in
subparagraph (A)(ii) shall be increased by an amount
equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for such
calendar year, determined by substituting
`calendar year 2026' for `calendar year 2016'
in subparagraph (A)(ii) thereof.
Any increase determined under the preceding sentence
which is not a multiple of $100,000 shall be rounded to
the nearest multiple of $100,000.
``(4) Tokenized digital asset.--The term `tokenized digital
asset' means any digital asset (other than any qualified U.S.
dollar stablecoin) if more than an insignificant portion of the
value of such digital asset is related to anything other than
the operation of the cryptographically secured distributed
ledger on which such digital asset is recorded.
``(5) Wrapped digital asset.--The term `wrapped digital
asset' means, except as otherwise provided by the Secretary to
prevent abuse, any digital asset if such asset--
``(A) is redeemable on demand, on a one-for-one
basis, for another digital asset, and
``(B) is recorded on a cryptographically secured
distributed ledger other than the cryptographically
secured distributed ledger on which the digital asset
referred to in subparagraph (A) is recorded.
``(6) Reference digital asset.--
``(A) In general.--The term `reference digital
asset' means, with respect to any wrapped digital
asset, the digital asset referred to in paragraph
(4)(A).
``(B) Special rule for rewrappings.--If, but for
this subparagraph, the reference digital asset with
respect to any wrapped digital asset would be a wrapped
digital asset (hereafter referred to in this paragraph
as the lower-tier wrapped digital asset)--
``(i) subparagraph (A) shall be applied
with respect to such lower-tier wrapped digital
asset, and
``(ii) the reference digital asset with
respect to such lower-tier wrapped digital
asset shall be treated as the reference digital
asset of such wrapped digital asset.
``(C) Multiple wrappings.--If, after the
application of subparagraph (B), the reference digital
asset with respect to the lower-tier wrapped digital
asset is a wrapped digital asset, such subparagraph
shall be reapplied by treating such lower-tier wrapped
digital asset as the wrapped digital asset.
``(7) Stablecoin.--
``(A) Qualified u.s. dollar stablecoin.--The term
`qualified U.S. dollar stablecoin' means any U.S.
dollar stablecoin which is issued by--
``(i) a permitted payment stablecoin issuer
(as defined in section 2(23) of the GENIUS Act,
as in effect on the date of the enactment of
this paragraph), or
``(ii) a foreign payment stablecoin issuer
(as defined in section 2(12) of the GENIUS Act,
as so in effect) which is permitted under such
Act (as so in effect) to offer, sell, or
otherwise make available such U.S. dollar
stablecoin in the United States.
``(B) U.S. dollar stablecoin.--The term `U.S.
dollar stablecoin' means a payment stablecoin as
defined in section 2(22) of the GENIUS Act (as in
effect on the date of the enactment of this paragraph)
applied by substituting `dollars' for `monetary value'
each place it appears in such section.
``(C) Publication of list.--The Secretary shall, to
the extent feasible, regularly publish a list of
qualified U.S. dollar stablecoins.
``(D) Limited authority to treat stablecoins as
money.--The Secretary may issue such regulations or
other guidance as may be necessary or appropriate to
(except as otherwise expressly provided in this
title)--
``(i) treat qualified U.S. dollar
stablecoins as dollars, and
``(ii) treat other stablecoins as currency
if such treatment would increase Federal
revenues.
``(8) Digital asset transaction.--The term `digital asset
transaction' means any transfer of a digital asset recorded on
the cryptographically secured distributed ledger (or similar
technology) referred to in paragraph (1).
``(9) Digital asset validation supporting activities.--The
term `digital asset validation supporting activities' means
staking, mining, or similar activities in support of the
validation of digital asset transactions.
``(10) Validation.--The term `validate', and any derivative
of such term (including `validation'), when used in connection
with a digital asset transaction, includes the processes of
proposing transactions for validation and verifying the
validation of transactions.
``(11) Staking.--The term `staking', when used in
connection with a digital asset, means--
``(A) making such asset available in support of the
validation of digital asset transactions, and
``(B) except as otherwise provided by the
Secretary, any substantially similar activity.
``(12) Mining.--The term `mining', when used in connection
with a digital asset, means--
``(A) performing computations, or making available
computing power, in support of the validation of
digital asset transactions, and
``(B) except as otherwise provided by the
Secretary, any substantially similar activity.''.
SEC. 5. RULES OF CONSTRUCTION.
(a) No Inference With Respect to Application of Other Provisions of
Law.--Except as otherwise expressly provided by this Act (or an
amendment made by this Act) with respect to the application of one or
more provisions of the Internal Revenue Code of 1986, nothing in this
Act (or any amendment made by this Act) shall be construed to create an
inference that a digital asset does or does not constitute a security,
a commodity, debt, equity, stock, a partnership interest, or an
interest in a trust, for purposes of any provision of law.
(b) No Inference With Respect to Prior Periods.--No provision of
this Act (or any amendment made by this Act) shall be construed to
create any inference with respect to the proper application of any
provision of the Internal Revenue Code of 1986 with respect to any
period before the period to which such provision or amendment applies.
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