HouseH.R. 9175119th Congress
Tax Clarity for Mining and Staking Act
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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9175 Introduced in House (IH)]
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119th CONGRESS
2d Session
H. R. 9175
To amend the Internal Revenue Code of 1986 to provide rules for
taxation of income relating to the mining and staking of digital
assets, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 8, 2026
Mr. Carey 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 provide rules for
taxation of income relating to the mining and staking of 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 ``Tax Clarity for
Mining and Staking 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. Treatment of certain digital assets received in connection with
the validation of digital asset
transactions.
Sec. 3. Investment trusts engaged in digital asset staking.
Sec. 4. Definitions.
SEC. 2. TREATMENT OF CERTAIN DIGITAL ASSETS RECEIVED IN CONNECTION WITH
THE VALIDATION OF DIGITAL ASSET TRANSACTIONS.
(a) In General.--Chapter 1 is amended by inserting after subchapter
V the following new subchapter:
``Subchapter W--Newly Minted Digital Assets Received in Connection With
the Validation of Digital Asset Transactions
``Sec. 1400W-1. Current inclusions in gross income; costs not
capitalized.
``Sec. 1400W-2. Election to defer inclusion of income and capitalize
costs of qualified newly minted digital
assets.
``Sec. 1400W-3. Definitions; regulations.
``SEC. 1400W-1. CURRENT INCLUSIONS IN GROSS INCOME; COSTS NOT
CAPITALIZED.
``(a) In General.--In the case of the acquisition of any newly
minted digital asset--
``(1) the fair market value of such asset shall be included
in the taxpayer's gross income as ordinary income as of the
time of such acquisition, and
``(2) the amount included in gross income under paragraph
(1) shall be properly taken into account in determining the
taxpayer's basis in such asset.
``(b) Acquisition Costs Not Capitalized.--
``(1) In general.--Notwithstanding any provision of this
title (other than paragraph (2) and section 1400W-2), specified
acquisition costs shall be treated as an expense which is not
chargeable to capital account.
``(2) Authority for exception to conform with taxpayer's
applicable financial statement.--The Secretary may issue
regulations or other guidance which allow specified acquisition
costs to be chargeable to capital account if such treatment
would be consistent with the treatment of such costs for
purposes of the applicable financial statement (as defined in
section 451(b)(3)) of the taxpayer.
``SEC. 1400W-2. ELECTION TO DEFER INCLUSION OF INCOME AND CAPITALIZE
COSTS OF QUALIFIED NEWLY MINTED DIGITAL ASSETS.
``(a) In General.--Notwithstanding section 1400W-1, in the case of
any taxpayer for any taxable year to which an election under subsection
(e) applies--
``(1) all qualified newly minted digital assets acquired by
such taxpayer during such taxable year shall not be included in
the taxpayer's gross income by reason of such acquisition, and
``(2) specified acquisition costs paid or incurred during
such taxable year shall be chargeable to capital account with
respect to qualified newly minted digital assets in accordance
with the rules provided in subsection (c) (and no deduction
shall otherwise be allowed under this subtitle with respect to
such costs).
``(b) Recognition and Character of Gain or Loss on Disposition.--
``(1) In general.--In the case of a disposition of any
qualified newly minted digital asset--
``(A) any gain on such disposition shall be--
``(i) recognized notwithstanding any other
provision of this subtitle, and
``(ii) treated as gain from the disposition
of property which is not a capital asset, and
``(B) any loss on such disposition shall be treated
as loss from the disposition of property which is not a
capital asset to the extent that such loss exceeds the
portion of the basis of such property that is not
attributable to specified acquisition costs.
``(2) Exception for certain nonrecognition transactions.--
Paragraph (1) shall not apply to--
``(A) any disposition to which section 1058
applies, and
``(B) to the extent provided by the Secretary, any
disposition which is a nonrecognition transaction
described in subchapter C or K.
``(3) Special rule for determining carryover basis.--In the
case of any disposition of a qualified newly minted digital
asset with respect to which gain is recognized by the
transferor under paragraph (1), if the basis of such asset in
the hands of the transferee is determined by reference to the
basis of such asset in the hands of the transferor, proper
adjustments shall be made in the determination of basis to take
into account such gain.
``(c) Capitalization of Specified Acquisition Costs.--
``(1) In general.--For purposes of this section, the
Secretary shall provide rules for the proper allocation of
specified acquisition costs among qualified newly minted
digital assets.
``(2) Cessation of activities.--The rules provided under
paragraph (1) shall include rules that provide for the proper
deduction of specified acquisition costs which are not
otherwise allocated to qualified newly minted digital assets
pursuant to such rules because the taxpayer indefinitely ceases
all activities related to the validation of digital assets
(including staking and mining).
``(d) Qualified Newly Minted Digital Asset.--For purposes of this
section--
``(1) In general.--The term `qualified newly minted digital
assets' means, with respect to any taxpayer for any taxable
year, any newly minted digital asset (determined without regard
to subparagraph (B) of section 1400W-3(a)(1)) acquired by such
taxpayer during such taxable year if--
``(A) the election under subsection (e) applies to
such taxpayer for such taxable year, and
``(B) the taxpayer--
``(i) in the case of any such newly minted
digital asset issued in connection with a
validation of digital asset transactions which
was not supported by the staking of digital
assets--
``(I) is the person who validated
such digital asset transactions, and
``(II) is the first owner of such
newly minted digital asset, or
``(ii) in the case of any such newly minted
digital asset issued in connection with a
validation of digital asset transactions which
was supported by the staking of digital
assets--
``(I) is the person who holds the
digital assets that were so staked, and
``(II) either is the first owner of
such newly minted digital asset or
acquired such newly minted digital
asset promptly after such newly minted
digital asset was issued.
``(2) Lessee treated as holder.--For purposes of paragraph
(1)(B)(ii)(I), if a digital asset is lent to any person, such
person (and not the person lending such asset) shall be treated
as holding such asset.
``(e) Election.--
``(1) In general.--An election under this section shall
apply for the taxable year for which it is made and for each
taxable year thereafter unless revoked with the consent of the
Secretary. Such election shall be made at such time and in such
manner as the Secretary may provide.
``(2) Application to partnerships and s corporations.--In
the case of any partnership or S corporation, the election
under this section shall be made at the partnership or S
corporation level.
``(3) Treatment as change in method of accounting.--A
taxpayer making an election under this section shall be treated
for purposes of section 481 as making a change in method of
accounting which is initiated by the taxpayer and made with the
consent of the Secretary. Such change shall be applied only on
a cut-off basis, and no adjustments shall be made under section
481(a).
``(f) Controlled Foreign Corporations and Passive Foreign
Investment Corporations Ineligible.--This section shall not apply to--
``(1) any controlled foreign corporation or any passive
foreign investment company (as defined in section 1297),
``(2) except as otherwise provided by the Secretary--
``(A) any foreign trust, and
``(B) any partnership in which one or more
controlled foreign corporations, passive foreign
investment companies (as so defined), or foreign trusts
are partners in such partnership, and
``(3) to the extent provided by the Secretary, any
partnership or trust if one or more entities described in
paragraph (2)(B) are indirectly partners in such partnership or
direct or indirect beneficiaries of such trust.
``(g) Treatment of Certain Grantor Trusts.--The regulations or
other guidance issued by the Secretary under section 1400W-3(c) may
include regulations or other guidance providing rules for the
application of this section with respect to digital assets owned
through a widely traded fixed investment trust, including regulations
or other guidance--
``(1) modifying information reporting requirements or
requiring additional information reporting with respect to
newly minted digital assets acquired through such a trust,
``(2) providing reasonable methods for brokers (or any
other person required to report information with respect to
such a trust) to determine and report the portion of the
interest in such a trust that results from the acquisition of
newly minted digital assets during a taxpayer's holding period,
``(3) requiring owners of interests in such a trust to
notify the broker (or any other person required to report
information with respect to such a trust) whether an election
has been made under subsection (e),
``(4) providing rules for the appropriate allocation of
basis to the portion of the interest in such a trust that is
attributable to the acquisition of newly minted digital assets,
including by requiring the allocation of any basis (other than
specified acquisition costs required to be capitalized under
this section) to a taxpayer's other interests in such a trust,
``(5) providing rules to reduce administrative and
compliance burdens by providing for aggregation, approximation,
or other reasonable methods to compute and report gain
attributable to newly minted digital assets acquired through
such a trust, and
``(6) defining the widely traded fixed investment trusts to
which the regulations or other guidance under this subsection
applies.
``SEC. 1400W-3. DEFINITIONS; SPECIAL RULES; REGULATIONS.
``(a) Definitions.--For purposes of this subchapter--
``(1) Newly minted digital asset.--
``(A) In general.--The term `newly minted digital
asset' means any digital asset that is issued in
connection with the validation of digital asset
transactions (including digital asset validation
supporting activities) and that (prior to such
issuance) was not owned by any person.
``(B) Termination of treatment as newly minted.--A
digital asset shall not be treated as a newly minted
digital asset at any time after the disposition of such
asset by the first owner of such asset.
``(C) Authorization of reasonable methods of
determination.--
``(i) In general.--Except as otherwise
provided pursuant to clause (ii), a taxpayer
may use any reasonable method to determine
whether a digital asset acquired by the
taxpayer is a newly minted digital asset.
``(ii) Authority of secretary to identify
methods.-- The Secretary may issue such
regulations or other guidance as the Secretary
determines necessary or appropriate specifying
methods that are, or are not, reasonable for
purposes of clause (i).
``(2) Specified acquisition costs.--
``(A) In general.--The term `specified acquisition
costs' means any amount paid or incurred in connection
with validating any digital asset transaction if, at
the time such amount is paid or incurred there is a
reasonable possibility that the taxpayer will acquire a
newly minted digital asset in connection with such
validation. Such term shall not include any amount
unless such amount would (without regard to this
subchapter) be either allowable as a deduction or
chargeable to capital account.
``(B) Inclusion of certain costs.--For purposes of
subparagraph (A), the term `amount paid or incurred in
connection with validating any digital asset
transaction' includes any amount paid or incurred in
connection with the activity of validating, or
attempting to validate, any digital asset transaction,
including--
``(i) the direct costs of such activity,
``(ii) indirect costs allocable to such
activity,
``(iii) fees paid or incurred to another
party to carry out such activity, and
``(iv) interest costs allocable to such
activity.
``(b) Special Rules.--For purposes of this subchapter--
``(1) Acquire.--A person shall be treated as acquiring a
newly minted digital asset in any case where such person comes
to possess such asset and without regard to the manner in which
such person comes to possess such asset.
``(2) Clarification that certain transfers are treated as
dispositions.--The following shall not fail to be treated as a
disposition for purposes of this subchapter:
``(A) The distribution of any digital asset from a
trust to a beneficiary.
``(B) The transfer of any digital asset from a
decedent (whether or not incident to the decedent's
death).
``(c) Regulations.--The Secretary shall issue such regulations or
other guidance as may be necessary or appropriate to carry out the
purposes of this subchapter, including to prevent the abuse of the
provisions of this subchapter.''.
(b) Clarification of Sourcing Rules for Digital Assets Acquired in
Connection With Validating Digital Asset Transactions.--Section 863 is
amended by adding at the end the following new subsection:
``(f) Treatment of Digital Assets Acquired in Connection With
Validating Digital Asset Transactions.--
``(1) Income on acquisition.--Income from the acquisition
of any digital asset received in connection with the validation
of digital asset transactions (including digital asset
validation supporting activities) shall be sourced--
``(A) in the United States if the taxpayer is a
United States resident at the time of acquisition, and
``(B) outside the United States if the taxpayer is
a nonresident at the time of acquisition.
``(2) Certain deferred income recognized on disposition.--
Income described in section 1400W-2(b) shall be sourced--
``(A) in the United States if the taxpayer is a
United States resident at the time of disposition, and
``(B) outside the United States if the taxpayer is
a nonresident at the time of disposition.
``(3) Treatment of branches.--
``(A) Foreign branches.--In the case of a United
States person with a qualified business unit (as
defined in section 989(a)) in a foreign country, income
described in paragraph (1) or (2) that constitute
business profits attributable to such unit shall be
sourced outside the United States.
``(B) U.S. branches.--In the case of a person that
is not a United States person and that maintains an
office or other fixed place of business in the United
States, income described in paragraph (1) or (2)
attributable to such office or other fixed place of
business shall be sourced in the United States.
``(C) Attribution.--For purposes of subparagraphs
(A) and (B), the Secretary may issue such regulations
or other guidance as the Secretary determines necessary
or appropriate for purposes of determining the amount
of business profits attributable to a qualified
business unit or office or other fixed place of
business.
``(4) Treatment of partnerships.--In the case of a
partnership, except as otherwise provided by the Secretary in
regulations or other guidance, this subsection shall be applied
at the partner level.
``(5) United states resident; nonresident.--For purposes of
this subsection, the terms `United States resident' and
`nonresident' have the meaning given such terms, respectively,
in section 865(g)(1), determined after application of section
865(g)(2).''.
(c) Rules Relating to Partnerships That Hold Newly Minted Digital
Assets.--Section 751(c) is amended in the flush language at the end--
(1) by striking ``and an oil, gas, or geothermal property
(described in section 1254)'' and inserting ``an oil, gas or
geothermal property (described in section 1254), and qualified
newly minted digital assets (as defined in section 1400W-
2(d))'', and
(2) by striking ``or 1254(a)'' and inserting ``1254(a), or
1400W-2(b)(1)(A)''.
(d) Coordination With Deduction for Qualified Business Income.--
Section 199A(c)(3)(B) is amended by redesignating clause (vii) as
clause (x) and inserting after clause (vi) the following new clauses:
``(vii) Any item of gain or loss on the
disposition of any newly minted digital asset
(as defined in section 1400W-3(a)(1)).
``(viii) Any item of income includible in
gross income under section 1400W-1(a)(1).
``(ix) Any item of gain realized under
subsection (a) or (b) of section 751 by reason
of the references in section 751(c) to
`qualified newly minted digital assets (as
defined in section 1400W-2(d)' and to `1400W-
2(b)(1)(A)'.''.
(e) Clerical Amendment.--The table of subchapters for chapter 1 is
amended by inserting after the item relating to subchapter V the
following new item:
``subchapter w--newly minted digital assets received in connection with
validating digital asset transactions''.
(f) Effective Date.--The amendments made by this section shall
apply to assets acquired in taxable years beginning after the date of
the enactment of this Act.
(g) No Inference With Respect to Proper Treatment of Newly Minted
Digital Assets to Which the Amendments Made by This Section Do Not
Apply.--Nothing in this section (or any amendment made by this section)
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 newly minted digital asset (as defined 1400W-3 of such
Code, as added by this section) acquired in any taxable year beginning
on or before the date of the enactment of this Act.
SEC. 3. INVESTMENT TRUSTS ENGAGED IN DIGITAL ASSET STAKING.
(a) In General.--Section 7701(p), as added by section 4 of this
Act, is amended by adding at the end the following new paragraph:
``(7) Status of trusts engaged in digital asset staking.--
``(A) In general.--An entity or arrangement shall
not fail to be treated as a trust for purposes of this
title solely by reason of the power of the trustee of
such entity or under such arrangement to--
``(i) engage in staking digital assets held
by the trust,
``(ii) retain or distribute digital assets
received in connection with such staking,
``(iii) determine which digital assets held
by the trust to use in staking,
``(iv) to the extent that any digital
assets held by the trust are committed to
staking, take measures necessary or appropriate
to ensure that the trust has sufficient
liquidity to make distributions in redemption
of interests in the trust, including by
purchasing the right to borrow money or digital
assets to make such distributions, and
``(v) perform acts related to the exercise
of the powers described in the preceding
clauses of this subparagraph.
``(B) Not to apply to validating trade or
business.--Subparagraph (A) shall not apply in the case
of an entity or arrangement engaged in the active
conduct of a trade or business of validating digital
asset transactions.
``(C) Regulations.--The Secretary may prescribe
such regulations or other guidance as may be necessary
or appropriate to carry out the purposes of this
paragraph.''.
(b) Clerical Amendment.--The heading for section 7701(p), as added
by section 4 of this Act, is amended by inserting ``and Special Rules''
after ``Definitions''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment 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) 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).
``(3) 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.
``(4) 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.
``(5) 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.
``(6) 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.''.
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