H.R. 9176

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9176 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 9176

To amend the Internal Revenue Code of 1986 to clarify the application 
of certain rules with respect to the trading of digital assets, and for 
other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

June 8, 2026

Mr. Kustoff 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 clarify the application 
of certain rules with respect to the trading of 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 ``Providing 
Analogous Rules for Digital Assets Act'' or the ``PAR 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. Transfers of traded digital assets pursuant to a lending 
agreement.
Sec. 3. Dealers and traders of widely traded digital assets.
Sec. 4. Digital asset trading safe harbor.
Sec. 5. Definitions.
Sec. 6. Rules of construction.

SEC. 2. TRANSFERS OF TRADED DIGITAL ASSETS PURSUANT TO A LENDING 
AGREEMENT.

(a) In General.--Subsections (a) and (b) of section 1058 are each 
amended by striking ``securities'' each place it appears and inserting 
``specified assets''.
(b) Specified Assets.--Section 1058 is amended by adding at the end 
the following new subsection:
``(d) Specified Assets.--For purposes of this section, the term 
`specified assets' means--
``(1) securities (as defined in section 1236(c)), and
``(2) traded digital assets.''.
(c) Treatment of Certain Legal Entitlements and Obligations Which 
Accrue During Period of Agreement.--Section 1058(b)(2) is amended to 
read as follows:
``(2) require that--
``(A) payments shall be made to the transferor of 
amounts equivalent to, except as otherwise provided by 
the Secretary, all interest, dividends, property, legal 
entitlements, and other distributions which the owner 
of the specified assets is entitled to receive during 
the period beginning with the transfer of the specified 
assets by the transferor and ending with the transfer 
of identical specified assets back to the transferor, 
and
``(B) in the case of any transfer of traded digital 
assets, the transferor shall assume all obligations 
imposed on the owner of such traded digital assets 
during the period described in subparagraph (A),''.
(d) Conforming Amendments.--
(1) Section 1058(a) is amended by striking ``(as defined in 
section 1236(c))''.
(2) The heading of section 1058, and the item relating to 
section 1058 in the table of sections for part IV of subchapter 
O of chapter 1, are each amended by striking ``securities'' and 
inserting ``specified assets''.
(e) Effective Date.--The amendments made by this section shall 
apply to transfers made after the date of the enactment of this Act.

SEC. 3. DEALERS AND TRADERS OF WIDELY TRADED DIGITAL ASSETS.

(a) In General.--Section 475 is amended by redesignating subsection 
(g) as subsection (h) and by inserting after subsection (f) the 
following new subsection:
``(g) Election of Mark to Market for Dealers in Covered Digital 
Assets.--
``(1) In general.--In the case of a dealer in covered 
digital assets who elects the application of this subsection, 
this section shall apply to covered digital assets held by such 
dealer in the same manner as this section applies to securities 
held by a dealer in securities.
``(2) Covered digital asset.--For purposes of this section, 
the term `covered digital asset' means--
``(A) any widely traded digital asset,
``(B) any notional principal contract with respect 
to any widely traded digital asset,
``(C) any evidence of an interest in, or a 
derivative instrument in, any widely traded digital 
asset described in subparagraph (A) or (B), including 
any option, forward contract, futures contract, short 
position, and any similar instrument in such widely 
traded digital asset, and
``(D) any position which--
``(i) is not a covered digital asset 
described in subparagraph (A), (B), or (C),
``(ii) is a hedge with respect to such a 
covered digital asset, and
``(iii) is clearly identified in the 
taxpayer's records as being described in this 
subparagraph before the close of the day on 
which it was acquired or entered into (or such 
other time as the Secretary may by regulations 
prescribe).
``(3) Election.--An election under this subsection may be 
made without the consent of the Secretary. Such an election, 
once made, shall apply to the taxable year for which made and 
all subsequent taxable years unless revoked with the consent of 
the Secretary.''.
(b) Application of Mark to Market Rules to Covered Digital 
Assets.--Section 475(f) is amended--
(1) in the heading, by striking ``or Commodities'' and 
inserting ``, Commodities, or Covered Digital Assets'',
(2) by redesignating paragraph (3) as paragraph (4) and by 
inserting after paragraph (2) the following new paragraph:
``(3) Traders in covered digital assets.--In the case of a 
person who is engaged in a trade or business as a trader in 
covered digital assets and who elects to have this paragraph 
apply to such trade or business, paragraph (1) shall apply to 
covered digital assets held by such trader in connection with 
such trade or business in the same manner as paragraph (1) 
applies to securities held by a trader in securities.'', and
(3) in paragraph (4), as so redesignated, by striking 
``paragraphs (1) and (2)'' and inserting ``paragraphs (1), (2), 
and (3)''.
(c) Treatment of Covered Digital Assets Which Are Securities or 
Commodities.--Section 475(d) is amended by adding at the end the 
following new paragraph:
``(4) Treatment of covered digital assets which are 
securities or commodities.--In the case of any covered digital 
asset which is a security or commodity (determined without 
regard to this paragraph), such covered digital asset shall not 
be treated as a security or commodity for purposes of 
subsections (b) through (g).''.
(d) Treatment of Adjustments Attributable to Election of Mark to 
Market.--Section 475(d), as amended by subsection (c), is amended by 
adding at the end the following new paragraph:
``(5) Adjustments attributable to mark to market treatment 
of securities, commodities, or covered digital assets.--In the 
case of an adjustment described in section 481(a) by reason of 
the application of subsection (a), (e), (f), or (g) of this 
section, the character of any income or loss with respect to 
any property as a result of such adjustment shall be the same 
as the character of the gain or loss which would have resulted 
from the sale of such property as of the close of the taxable 
year preceding the year of the change (within the meaning of 
section 481) under the method of accounting used for such 
preceding taxable year.''.
(e) Conforming Amendments.--
(1) Section 475(e)(2) is amended by striking ``this 
subsection and subsection (f)'' and inserting ``this section''.
(2) The heading of section 475 is amended by striking 
``dealers in securities'' and inserting ``certain dealers and 
traders''.
(3) The table of sections for subpart D of part II of 
subchapter E of chapter 1 is amended by striking the item 
relating to section 475 and inserting the following:

``Sec. 475. Mark to market accounting method for certain dealers and 
traders.''.
(f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
(g) 4-year Spread of Adjustments.--In the case of a taxpayer that 
elects under subsection (f)(3) or (g) of section 475 of the Internal 
Revenue Code of 1986 (as added by this section) to change such 
taxpayer's method of accounting for the taxpayer's first taxable year 
beginning after the date of the enactment of this Act--
(1) any identification required with respect to such 
subsection with respect to covered digital assets held on the 
first day of such taxable year shall be treated as timely made 
if made on or before the 30th day of such taxable year, and
(2) the net amount of the adjustments required to be taken 
into account by the taxpayer under section 481 of such Code by 
reason of such subsection shall be taken into account ratably 
over the 4-taxable year period beginning with such taxable 
year.

SEC. 4. DIGITAL ASSET TRADING SAFE HARBOR.

(a) In General.--Section 864(b)(2) is amended--
(1) in the heading, by striking ``or commodities'' and 
inserting ``commodities, or traded digital assets'',
(2) by redesignating subparagraph (C) as subparagraph (D) 
and by inserting the following new subparagraph after 
subparagraph (B):
``(C) Traded digital assets.--
``(i) In general.--Trading in traded 
digital assets through a resident broker, 
commission agent, custodian, or other 
independent agent.
``(ii) Trading for taxpayer's own 
account.--Trading in traded digital assets for 
the taxpayer's own account, whether by the 
taxpayer or his employees or through a resident 
broker, commission agent, custodian, or other 
agent, and whether or not any such employee or 
agent has discretionary authority to make 
decisions in effecting the transactions. This 
clause shall not apply in the case of a dealer 
in digital assets.'', and
(3) in subparagraph (D), as so redesignated, by striking 
``and (B)(i)'' and inserting ``, (B)(i), and (C)(i)''.
(b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2025.

SEC. 5. 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 
(5)(A).
``(B) Special rule for rewrappings.--If, but for 
this clause, 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.''.

SEC. 6. 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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