H.R. 9172

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9172 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 9172

To amend the Internal Revenue Code of 1986 to apply the wash sale rules 
and constructive sale rules to digital assets, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

June 8, 2026

Mr. Arrington 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 apply the wash sale rules 
and constructive sale rules to 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 ``Applying Existing 
Tax Anti-Abuse Rules to Digital Assets 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. Application of wash sale rules to digital assets.
Sec. 3. Application of constructive sale rules to digital assets.
Sec. 4. Definitions.
Sec. 5. Rules of construction.

SEC. 2. APPLICATION OF WASH SALE RULES TO DIGITAL ASSETS.

(a) In General.--Section 1091 is amended--
(1) by striking ``stock or securities'' each place it 
appears and inserting ``specified assets'', and
(2) by striking ``shares of'' each place it appears.
(b) Specified Asset.--Section 1091 is amended by adding at the end 
the following new subsection:
``(g) Specified Asset.--For purposes of this section--
``(1) In general.--The term `specified asset' means--
``(A) any stock or security, and
``(B) any digital asset other than a qualified U.S. 
dollar stablecoin.
``(2) Contracts and options.--Except as otherwise provided 
in regulations, the term `specified asset' includes any 
contract or option to acquire or sell any specified asset 
described in paragraph (1).
``(3) Treatment of tokenized digital assets as 
substantially identical to an economically equivalent stock or 
security.--A tokenized digital asset (and a wrapped digital 
asset with respect to which the reference digital asset is a 
traded digital asset) shall be treated as substantially 
identical to any stock, security, or digital asset if such 
tokenized digital asset (or such wrapped digital asset) is 
economically equivalent to such stock, security, or digital 
asset.
``(4) Functional currency other than the dollar.--In the 
case of any taxpayer or qualified business unit (as defined in 
section 989(a)), a qualified U.S. dollar stablecoin shall not 
be treated as a qualified U.S. dollar stablecoin for purposes 
of paragraph (1)(B) if such taxpayer or qualified business unit 
uses a functional currency other than the dollar.''.
(c) Exception for Certain Acquisitions of Digital Assets Acquired 
in Connection With Validation of Digital Asset Transactions.--Section 
1091, as amended by subsection (b), is amended by adding at the end the 
following new subsection:
``(h) Exception for Certain Acquisitions of Digital Assets Acquired 
in Connection With the Validation of Digital Asset Transactions.--The 
acquisition of a digital asset shall not be taken into account under 
this section if such digital asset is acquired in connection with the 
validation of digital asset transactions (including digital asset 
validation supporting activities).''.
(d) Conforming Amendments.--
(1) Section 1091(a) is amended by striking the last 
sentence.
(2) Section 1091(e) (as amended by subsection (a)) is 
amended to read as follows:
``(e) Certain Short Sales of Specified Assets and Specified Asset 
Futures Contracts To Sell.--Rules similar to the rules of subsection 
(a) shall apply to any loss realized on the closing of a short sale of 
(or the sale, exchange, or termination of a specified asset futures 
contract to sell) specified assets if, within a period beginning 30 
days before the date of such closing and ending 30 days after such 
date--
``(1) substantially identical specified assets were sold, 
or
``(2) another short sale of (or specified asset futures 
contracts to sell) substantially identical specified assets was 
entered into.
For purposes of this subsection, the term ``specified asset futures 
contract'' has the meaning provided by section 1234B(c).''.
(3) The heading of section 1091 is amended by striking 
``stock or securities'' and inserting ``specified assets''.
(4) The headings of subsections (b), (c), and (d) of 
section 1091 are each amended by striking ``Stock'' each place 
it appears and inserting ``Specified Assets''.
(5) The item relating to section 1091 in the table of 
sections for part VII of subchapter O of chapter 1 is amended 
by striking ``stock or securities'' and inserting ``specified 
assets''.
(6) Section 312(f)(1) is amended by striking ``stock or 
securities'' and inserting ``specified assets''.
(7) Section 1256(f)(5) is amended by striking ``stock or 
securities'' and inserting ``specified assets''.
(8) Section 6045(g)(2)(B)(ii) is amended--
(A) by striking ``stock or securities'' and 
inserting ``specified assets'', and
(B) by striking ``identical securities'' and 
inserting ``identical specified assets''.
(e) Effective Date.--The amendments made by this section shall 
apply to dispositions after the date of the introduction of this Act.
(f) Transition Rule Relating to Broker Reporting.--For purposes of 
section 6045 of the Internal Revenue Code of 1986, in the case of the 
sale or other disposition before January 1, 2028, of a digital asset to 
which section 1091 would not have applied but for the amendments made 
by this section, the customer's adjusted basis may be determined 
without regard to section 1091 of such Code.

SEC. 3. APPLICATION OF CONSTRUCTIVE SALE RULES TO DIGITAL ASSETS.

(a) In General.--Section 1259(b)(1) is amended by inserting ``, 
digital asset (other than a qualified U.S. dollar stablecoin)'' after 
``debt instrument''.
(b) Application of Exception for Sales of Nonpublicly Traded 
Property.--Section 1259(c)(2) is amended by inserting ``or widely 
traded digital asset'' after ``marketable security (as defined in 
section 453(f))''.
(c) Treatment of Tokenized Digital Assets as Substantially 
Identical to Economically Equivalent Financial Property.--Section 
1259(c) is amended by adding at the end the following new paragraph:
``(5) Treatment of tokenized digital assets as 
substantially identical to economically equivalent financial 
property.--A tokenized digital asset shall be treated as 
substantially identical to any stock, debt instrument, or 
partnership interest if such tokenized digital asset is 
economically equivalent to such stock, debt instrument, or 
partnership interest.''.
(d) Functional Currency Other Than the Dollar.--Section 1259(e) is 
amended by adding at the end the following new paragraph:
``(4) Qualified u.s. dollar stablecoins and functional 
currency other than the dollar.--In the case of any taxpayer or 
qualified business unit (as defined in section 989(a)), a 
qualified U.S. dollar stablecoin (determined without regard to 
this paragraph) shall not be treated as a qualified U.S. dollar 
stablecoin for purposes of this section if such taxpayer or 
qualified business unit uses a functional currency other than 
the dollar.''.
(e) Effective Date.--The amendments made by this section shall 
apply to constructive sales after the date of the introduction 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) Traded digital asset.--The term `traded digital 
asset' means, except as otherwise provided by the Secretary to 
prevent abuse, any digital asset if--
``(A) such asset is fungible,
``(B) quotations of such asset are readily 
available on an exchange (or, in the case of an 
exchange that does not provide quotations, such 
quotations are readily ascertainable), and
``(C) such asset is either--
``(i) not a tokenized digital asset, or
``(ii) a wrapped digital asset with respect 
to which the reference digital asset is a 
traded digital asset.
``(3) Widely traded digital asset.--
``(A) In general.--The term `widely traded digital 
asset' means, with respect to any taxpayer for any 
taxable year and except as otherwise provided by the 
Secretary to prevent abuse, any traded digital asset 
if--
``(i) quotations for such asset were 
readily available on an exchange for the entire 
calendar year which ends in or with the taxable 
year preceding such taxable year,
``(ii) the market capitalization of such 
asset exceeded $500,000,000 at substantially 
all times during such calendar year, and
``(iii) not more than 10 percent of the 
units of such asset were owned, directly or 
indirectly, by the taxpayer or any person 
described with respect to the taxpayer under 
section 267(b) (applied without regard to 
section 267(c)(3)) or section 707(b)(1) at any 
time during such taxable year or such preceding 
taxable year.
``(B) Special rule for wrapped digital assets.--In 
the case of any wrapped digital asset, except as 
otherwise provided by the Secretary to prevent abuse, 
such asset shall be treated as a widely traded digital 
asset if, and only if, the reference digital asset with 
respect to such wrapped digital asset is a widely 
traded digital asset.
``(C) Authority to ensure reliable price 
discovery.--For purposes of subparagraphs (A) and (B), 
the term `prevent abuse' includes the exclusion of 
assets that lack reliable price discovery or that the 
Secretary determines are at risk of price manipulation.
``(D) Authority to adjust requirements.--The 
Secretary may, by regulation, provide requirements that 
apply in lieu of one or more of the requirements of 
clauses (i) through (iii) of subparagraph (A) if the 
Secretary determines that due to changes in market 
conditions (including by reason of the enactment of 
Federal digital asset market structure legislation) 
that such alternative requirements would more 
effectively or efficiently identify traded digital 
assets for which there is consistent and reliable price 
discovery.
``(E) Inflation adjustment.--In the case of any 
calendar year after 2027, the $500,000,000 amount in 
subparagraph (A)(ii) shall be increased by an amount 
equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment 
determined under section 1(f)(3) for such 
calendar year, determined by substituting 
`calendar year 2026' for `calendar year 2016' 
in subparagraph (A)(ii) thereof.
Any increase determined under the preceding sentence 
which is not a multiple of $100,000 shall be rounded to 
the nearest multiple of $100,000.
``(4) Tokenized digital asset.--The term `tokenized digital 
asset' means any digital asset (other than any qualified U.S. 
dollar stablecoin) if more than an insignificant portion of the 
value of such digital asset is related to anything other than 
the operation of the cryptographically secured distributed 
ledger on which such digital asset is recorded.
``(5) Wrapped digital asset.--The term `wrapped digital 
asset' means, except as otherwise provided by the Secretary to 
prevent abuse, any digital asset if such asset--
``(A) is redeemable on demand, on a one-for-one 
basis, for another digital asset, and
``(B) is recorded on a cryptographically secured 
distributed ledger other than the cryptographically 
secured distributed ledger on which the digital asset 
referred to in subparagraph (A) is recorded.
``(6) Reference digital asset.--
``(A) In general.--The term `reference digital 
asset' means, with respect to any wrapped digital 
asset, the digital asset referred to in paragraph 
(4)(A).
``(B) Special rule for rewrappings.--If, but for 
this subparagraph, the reference digital asset with 
respect to any wrapped digital asset would be a wrapped 
digital asset (hereafter referred to in this paragraph 
as the lower-tier wrapped digital asset)--
``(i) subparagraph (A) shall be applied 
with respect to such lower-tier wrapped digital 
asset, and
``(ii) the reference digital asset with 
respect to such lower-tier wrapped digital 
asset shall be treated as the reference digital 
asset of such wrapped digital asset.
``(C) Multiple wrappings.--If, after the 
application of subparagraph (B), the reference digital 
asset with respect to the lower-tier wrapped digital 
asset is a wrapped digital asset, such subparagraph 
shall be reapplied by treating such lower-tier wrapped 
digital asset as the wrapped digital asset.
``(7) Stablecoin.--
``(A) Qualified u.s. dollar stablecoin.--The term 
`qualified U.S. dollar stablecoin' means any U.S. 
dollar stablecoin which is issued by--
``(i) a permitted payment stablecoin issuer 
(as defined in section 2(23) of the GENIUS Act, 
as in effect on the date of the enactment of 
this paragraph), or
``(ii) a foreign payment stablecoin issuer 
(as defined in section 2(12) of the GENIUS Act, 
as so in effect) which is permitted under such 
Act (as so in effect) to offer, sell, or 
otherwise make available such U.S. dollar 
stablecoin in the United States.
``(B) U.S. dollar stablecoin.--The term `U.S. 
dollar stablecoin' means a payment stablecoin as 
defined in section 2(22) of the GENIUS Act (as in 
effect on the date of the enactment of this paragraph) 
applied by substituting `dollars' for `monetary value' 
each place it appears in such section.
``(C) Publication of list.--The Secretary shall, to 
the extent feasible, regularly publish a list of 
qualified U.S. dollar stablecoins.
``(D) Limited authority to treat stablecoins as 
money.--The Secretary may issue such regulations or 
other guidance as may be necessary or appropriate to 
(except as otherwise expressly provided in this 
title)--
``(i) treat qualified U.S. dollar 
stablecoins as dollars, and
``(ii) treat other stablecoins as currency 
if such treatment would increase Federal 
revenues.
``(8) 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).
``(9) 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.
``(10) 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.
``(11) 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.
``(12) 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.''.

SEC. 5. RULES OF CONSTRUCTION.

(a) No Inference With Respect to Application of Other Provisions of 
Law.--Except as otherwise expressly provided by this Act (or an 
amendment made by this Act) with respect to the application of one or 
more provisions of the Internal Revenue Code of 1986, nothing in this 
Act (or any amendment made by this Act) shall be construed to create an 
inference that a digital asset does or does not constitute a security, 
a commodity, debt, equity, stock, a partnership interest, or an 
interest in a trust, for purposes of any provision of law.
(b) No Inference With Respect to Prior Periods.--No provision of 
this Act (or any amendment made by this Act) 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 
period before the period to which such provision or amendment applies.
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