Congress Takes On Crypto Taxes — and the Changes Could Be Significant

Tax rules for cryptocurrency in the U.S. could change significantly.

On September 16, the House Ways and Means Committee approved H.R. 10357 — the Digital Asset Tax Certainty Act — by a vote of 38–5.

One important clarification:

This is not law yet.

The bill has passed the committee and must still go through the legislative process. So it is too early to change your tax strategy based on these proposals.

But this bill is definitely worth watching.

Because we are not talking about one small change. This is an attempt to create a more comprehensive federal tax framework for digital assets.

What Could Change for Crypto Owners?

One of the biggest proposed changes involves the wash-sale rules.

Currently, the wash-sale rules that have long applied to securities do not apply to digital assets in the same way.

The bill proposes extending these anti-abuse rules to cryptocurrency.

What could that mean in practice?

The strategy of selling crypto at a loss, claiming the tax loss, and then quickly buying the same asset back could become significantly more complicated from a tax perspective.

In addition to the wash-sale rules, the bill would extend constructive-sale rules and certain other anti-abuse provisions to digital assets.

But the Bill Is Not Just About New Restrictions

It also includes provisions that could simplify tax treatment for some digital asset owners.

For example, the bill proposes:

→ allowing certain digital asset dealers and traders to use mark-to-market accounting;

→ bringing the rules for charitable donations of certain widely traded digital assets closer to those for publicly traded securities;

→ simplifying the tax treatment of certain small blockchain and network transaction fees;

→ modifying certain reporting requirements;

→ clarifying certain tax rules for mining and staking.

In other words, the overall idea is not simply to introduce new restrictions.

The proposal also attempts to bring the taxation of digital assets closer to the existing tax framework for traditional financial assets.

What If You Have Crypto That Was Never Properly Reported?

This is one of the particularly interesting parts of the bill.

H.R. 10357 would establish a special voluntary disclosure program for digital assets.

The program would give certain taxpayers an opportunity to voluntarily correct previous crypto-related tax compliance issues with reduced penalties.

If this provision becomes law, Treasury would still need to develop the specific rules and procedures for the program.

And the Bill Is Not Limited to Cryptocurrency

H.R. 10357 also includes a proposed change involving gambling losses.

The provision is intended to restore the ability to deduct gambling losses up to the amount of gambling winnings, reducing situations where someone could end up with taxable income on paper even though they did not actually walk away with that amount of money.

So What Should You Do Now?

For now — watch the bill.

H.R. 10357 still has to move through the legislative process, so the tax rules currently in effect have not automatically changed.

But if you actively trade cryptocurrency, participate in mining or staking, use tax-loss strategies, or have digital assets that may not have been properly reported on prior-year tax returns, this bill is worth keeping on your radar.

Because if these provisions become law, some familiar crypto tax strategies could look very different.