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HR10357119th CongressWALLET

Digital Asset Tax Certainty Act

Sponsored By: Representative Smith, Jason [R-MO-8]

In Committee

Summary

Tax certainty for digital assets by folding crypto into established tax rules and creating narrow exceptions and elections for payments, stablecoins, lending, reporting, and validation activities.

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  • Retail users and small-payments users: Small network validation and transaction fees paid in crypto do not trigger gain or loss if they meet a de minimis test, generally capped at $10 per validation or $10 aggregate for certain brokerage fees and subject to volume limits like a 5,000-transfer threshold.
  • Traders, dealers, and funds: Dealers and traders can elect mark-to-market for covered digital assets and taxpayers may choose a simplified annual accounting method for designated widely traded assets, with gains and losses under that election treated as short-term.
  • Brokers, compliance, and IRS interactions: The bill expands broker reporting (Sec. 6045), adds backup-withholding-like rules for certain illiquid validation assets, and creates a Digital Asset Voluntary Disclosure Program with penalty tiers such as 25% and 40% for disclosed digital-asset deficiencies.

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Bill Overview

Analyzed Economic Effects

9 provisions identified: 2 benefits, 3 costs, 4 mixed.

Limit on taxable gambling losses

If enacted, wagering or gambling losses would be deductible only up to the amount of wagering gains for tax years beginning after December 31, 2025. The bill clarifies that deductions tied to wagering activity are limited to wagering gains.

Donate crypto and avoid gain

If enacted, you would not recognize gain on a sale of certain digital assets if you donate all the sale proceeds to charity within seven days or by the end of your tax year. The rule starts for tax years after December 31, 2026 and excludes qualified U.S. dollar stablecoins, some widely traded assets, tokenized assets, and related-party sales.

Business technical rules for crypto

If enacted, many digital assets bought after the bill's introduction would not count as Section 197 intangible assets and so would not be amortizable. Digital assets with no fixed maturity would be treated as maturing 25 years after issuance. The bill would also count traded digital assets when testing whether a transferor is an investment company for certain tax rules. These changes apply to assets or transfers after the dates in the bill.

New trader, wash‑sale, and accounting rules

If enacted, the bill would let dealers elect mark-to-market treatment for covered digital assets and create an annual simplified accounting election for designated widely traded assets starting for tax years after December 31, 2027. It would define when an asset is "widely traded." At the same time, traded digital assets would be brought into wash-sale, straddle, and constructive-sale rules and treated like specified asset futures or marketable securities in certain partnership rules. These changes apply to positions or distributions opened or made after the dates in the bill and include special partnership and dealer exceptions.

New stablecoin tax and partnership rules

If enacted, the bill would define which U.S. dollar stablecoins count as "qualified" and require Treasury to publish a list. For taxable years starting after December 31, 2026, basis for those stablecoins would generally equal their redemption value. The bill would treat some stablecoin lending and similar transfers like loans, with payments treated as interest. Partnerships would count some specified stablecoins as money and use fair market value on distribution. Brokers could exclude highly cash-equivalent stablecoins from certain reporting if basis meets a 99.5% test.

Staking, mining, and validator taxes

If enacted, income from staking, mining, or similar validation support would be taxed as ordinary income for tax years starting after enactment. The bill would source validation income to the United States for U.S. residents and outside the U.S. for nonresidents. It would add a withholding-like rule when validators receive restricted illiquid digital assets after December 31, 2026. The bill also expands Subpart F to capture some foreign staking/mining and lending income but keeps limited active-business exceptions. The bill would not treat a trust as losing trust status solely because the trustee stakes assets.

IRS disclosure program and guidance

If enacted, the Treasury must set up a Digital Asset Voluntary Disclosure Program within 12 months. Eligible taxpayers would have 24 months to file amended returns, pay deficiencies plus a tiered penalty, and could get reduced penalties if they certify non-willfulness. The bill also urges Treasury to issue digital-asset tax guidance and lets issuers place required disclosure statements in written terms or marketing materials. The bill clarifies it does not change whether a token is a security or commodity.

No tax on tiny crypto fees

If enacted, the bill would let taxpayers ignore small crypto fees for tax purposes when the fee per transfer is $10 or less and other limits are met. The rule would not apply to traders, brokers, dealers, or people with more than 5,000 transfers in the prior year. Brokers would generally not report fee-only dispositions but must keep information needed to verify basis. The de minimis fee exception would apply to dispositions after December 31, 2027.

U.S. possession holders must report

If enacted, certain residents of U.S. possessions with more than $10,000 in traded digital assets would have to file a notice listing the fair market value and basis of each asset for the prior year. A transition rule requires some taxpayers to give values as of January 1, 2027. If timely information is not provided, gains on disposition may be treated as U.S.-source income.

Sponsors & CoSponsors

Sponsor

Smith, Jason [R-MO-8]

MO • R

Cosponsors

  • Rep. Arrington, Jodey C. [R-TX-19]

    TX • R

    Sponsored 9/14/2026

  • Rep. Bean, Aaron [R-FL-4]

    FL • R

    Sponsored 9/14/2026

  • Rep. Carey, Mike [R-OH-15]

    OH • R

    Sponsored 9/14/2026

  • Rep. Horsford, Steven [D-NV-4]

    NV • D

    Sponsored 9/14/2026

  • Rep. Kelly, Mike [R-PA-16]

    PA • R

    Sponsored 9/14/2026

  • Rep. Kustoff, David [R-TN-8]

    TN • R

    Sponsored 9/14/2026

  • Rep. Miller, Max L. [R-OH-7]

    OH • R

    Sponsored 9/14/2026

  • Rep. Yakym, Rudy [R-IN-2]

    IN • R

    Sponsored 9/14/2026

Roll Call Votes

No roll call votes available for this bill.

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