Key Takeaways
- • The Digital Asset Tax Certainty Act (H.R. 10357), passed by the House Ways and Means Committee on Sept. 16, would import numerous tax concepts historically applied to stocks, commodities and financial products into digital asset taxation without redefining digital assets as securities for all legal purposes.
- • The bill would extend wash-sale limits to traded digital assets other than certain qualified stablecoins, and would allow dealers and traders in covered digital assets to elect mark-to-market treatment.
- • Qualified U.S. dollar stablecoins would receive separate treatment, including redemption-value basis rules and exclusion from broker reporting, with Treasury authority to treat qualifying stablecoins similarly to dollars for tax purposes.
- • Staking and mining income would be characterized as ordinary income with new sourcing rules, and a Digital Asset Voluntary Disclosure Program would be created within 12 months of enactment.
- • Congress is expected to be in recess until after the November midterm elections, so the committee-approved text indicates the direction of policy rather than imminent law.
Summary
The Digital Asset Tax Certainty Act, H.R. 10357, passed the House Ways and Means Committee on Sept. 16, according to RSM US LLP. The bill would not redefine digital assets as securities for all legal purposes. Instead, it would apply tax rules associated with stocks, commodities and other financial instruments to certain digital asset transactions, for both anti-abuse and simplification purposes. RSM notes that the proposal would introduce new reporting and compliance obligations alongside additional statutory guidance for businesses, investors and fund managers.
On loss harvesting, the bill would extend wash-sale limitations under section 1091 to traded digital assets other than certain qualified stablecoins. Dealers and traders in covered digital assets could elect mark-to-market treatment, while traded digital assets would be counted in determining whether a corporation or partnership is an investment company, a factor that contributors of digital assets would need to evaluate for tax-deferred treatment. The proposal also expands rules on constructive sales, digital asset lending, straddles, futures contracts and certain charitable contributions.
Qualified U.S. dollar-based stablecoins would receive separate treatment across several provisions, reflecting their stable dollar value. The bill would generally use redemption value to determine basis and gain or loss within specified value ranges, define qualifying stablecoins, and grant Treasury authority in certain circumstances to treat them similarly to dollars. Stablecoin transactions would be excluded from digital asset broker reporting.
The bill would characterize income from validation-supporting activities such as staking and mining as ordinary income and establish sourcing rules that depend on whether the taxpayer is a U.S. or nonresident and on certain U.S. or foreign business operations. RSM references the Tax Court decision in Paschall v. Commissioner, T.C. Memo 2026-46, which generally supported taxation where taxpayers have dominion and control over rewards. The bill would also allow an investment trust to conduct specified staking without losing trust status, provided it is not actively conducting a validation business.
For reporting, taxpayers could elect to recognize aggregate gains and losses by designated asset type, treated as short-term, and the bill would give nonrecognition treatment to qualifying network and transaction fees of no more than $10. The proposal would also direct Treasury to establish a Digital Asset Voluntary Disclosure Program within 12 months of enactment, offering relief from specified civil penalties and, for certain participants, protection against use of disclosed information in specified criminal referrals. RSM advises funds and active traders to review wash-sale and constructive-sale exposure and mark-to-market opportunities, and notes that the eventual rules could interact differently with each taxpayer's activities.
On loss harvesting, the bill would extend wash-sale limitations under section 1091 to traded digital assets other than certain qualified stablecoins. Dealers and traders in covered digital assets could elect mark-to-market treatment, while traded digital assets would be counted in determining whether a corporation or partnership is an investment company, a factor that contributors of digital assets would need to evaluate for tax-deferred treatment. The proposal also expands rules on constructive sales, digital asset lending, straddles, futures contracts and certain charitable contributions.
Qualified U.S. dollar-based stablecoins would receive separate treatment across several provisions, reflecting their stable dollar value. The bill would generally use redemption value to determine basis and gain or loss within specified value ranges, define qualifying stablecoins, and grant Treasury authority in certain circumstances to treat them similarly to dollars. Stablecoin transactions would be excluded from digital asset broker reporting.
The bill would characterize income from validation-supporting activities such as staking and mining as ordinary income and establish sourcing rules that depend on whether the taxpayer is a U.S. or nonresident and on certain U.S. or foreign business operations. RSM references the Tax Court decision in Paschall v. Commissioner, T.C. Memo 2026-46, which generally supported taxation where taxpayers have dominion and control over rewards. The bill would also allow an investment trust to conduct specified staking without losing trust status, provided it is not actively conducting a validation business.
For reporting, taxpayers could elect to recognize aggregate gains and losses by designated asset type, treated as short-term, and the bill would give nonrecognition treatment to qualifying network and transaction fees of no more than $10. The proposal would also direct Treasury to establish a Digital Asset Voluntary Disclosure Program within 12 months of enactment, offering relief from specified civil penalties and, for certain participants, protection against use of disclosed information in specified criminal referrals. RSM advises funds and active traders to review wash-sale and constructive-sale exposure and mark-to-market opportunities, and notes that the eventual rules could interact differently with each taxpayer's activities.
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