Applying Existing Tax Anti-Abuse Rules to Digital Assets Act
- Bill Number
- H.R. 9172
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-06-08: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-06-10T16:31:33Z
AI-Generated Summary
Purpose This legislation extends existing tax anti-abuse rules in the Internal Revenue Code to digital assets. Its goal is to prevent taxpayers from using digital assets to claim artificial losses or defer gains in ways already disallowed for stocks, securities, and similar property.
Key Provisions
- Wash Sale Rules (Section 2): Amends IRC Section 1091 to apply wash sale rules to "specified assets," defined as stocks, securities, or digital assets (excluding qualified U.S. dollar stablecoins). Losses on sales are disallowed if substantially identical assets are acquired within 30 days before or after the sale.
- Constructive Sale Rules (Section 3): Amends IRC Section 1259 to treat certain hedging or offsetting transactions involving digital assets (other than qualified U.S. dollar stablecoins) as constructive sales, triggering immediate gain recognition.
- Exceptions and Special Rules: Provides an exception for digital assets acquired through validation activities (such as staking or mining). Includes rules for tokenized and wrapped digital assets that are economically equivalent to stocks or other property.
- Definitions (Section 4): Adds detailed definitions to IRC Section 7701 for terms including digital asset, traded digital asset, widely traded digital asset, tokenized digital asset, wrapped digital asset, reference digital asset, and qualified U.S. dollar stablecoin. Stablecoins are tied to the GENIUS Act framework.
- Conforming Changes: Updates multiple IRC sections for consistency (e.g., Sections 312, 1256, 6045).
- Effective Dates: Applies to dispositions and constructive sales after the bill's introduction date, with a transition rule for broker reporting through 2027.
- Rules of Construction (Section 5): States that the bill creates no inference about whether digital assets qualify as securities, commodities, or other property under other laws, and does not affect prior tax periods.
Significant Changes to Existing Law
- Broadens the scope of wash sale and constructive sale rules from traditional financial instruments to most digital assets, closing a gap that previously allowed loss harvesting with cryptocurrencies.
- Introduces new categories and exceptions unique to digital assets, such as treatment of validation-related acquisitions and economic equivalence for tokenized assets.
- Requires updated broker reporting under Section 6045 to account for these rules.
Potential Impacts
- Government Agencies: Increases IRS oversight and enforcement needs for digital asset transactions; requires updates to reporting systems and potential new regulations.
- Citizens: Affects individual and business taxpayers by limiting loss deductions on digital asset trades and accelerating gain recognition in hedging scenarios, potentially raising tax liabilities.
- International Relations: References foreign stablecoin issuers permitted under U.S. law but focuses primarily on domestic application; may influence cross-border digital asset activities indirectly through stablecoin definitions.
Main Stakeholders Affected
- Taxpayers who buy, sell, or hold digital assets (including investors and businesses).
- Digital asset exchanges, brokers, and custodians subject to enhanced reporting.
- Participants in digital asset validation (miners and stakers).
- Stablecoin issuers and users.
- The IRS for administration and compliance.
Notable Legal, Constitutional, or Political Implications
- Maintains neutrality by avoiding any determination on the legal status of digital assets under securities or commodities laws.
- Authorizes the Treasury Secretary to issue regulations, including adjustments for market conditions or abuse prevention.
- Limits retroactive application through explicit rules of construction.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Arrington, Jodey C. [R-TX-19]
Recent Actions
- 2026-06-08: Referred to the House Committee on Ways and Means.
- 2026-06-08: Introduced in House
- 2026-06-08: Introduced in House
Bill Versions
- Applying Existing Tax Anti-Abuse Rules to Digital Assets Act — issued 2026-06-08 — PDF (17 pages)