House Panel Advances Crypto Tax Bill Limiting Some Loss Write-Offs

What the Bill Would Change for Crypto Loss Deductions

Under current law, crypto investors can sell a losing position, claim the tax loss, and immediately repurchase the same asset — a strategy known as tax-loss harvesting. H.R. 10357 would close that window by applying wash-sale rules to traded digital assets, the same anti-abuse framework that already governs stocks and securities. The Ways and Means Committee press release describes the measure as extending existing constructive-sale and wash-sale anti-abuse rules to digital assets. For related coverage, see the earlier House crypto tax bill the panel shared ahead of a formal hearing.

If enacted, a loss on a covered digital asset sold after September 14, 2026 — the bill’s introduction date — would be disallowed whenever the seller acquires the same or a substantially identical asset within 30 days before or after the sale, according to Unchained’s reporting on the bill’s mechanics. The committee action is an early legislative step, not enacted law. For related coverage, see Crypto ETFs edge toward access as Indiana HB 1042 advances.

The bill’s Title III defines a “specified asset” as a traded digital asset but explicitly excludes qualified U.S. dollar stablecoins. That carve-out means stablecoin holders would not be subject to wash-sale disallowance — a distinction that narrows the rule’s reach. This follows earlier House crypto tax proposals that drew similar stablecoin boundaries and addressed fee exemptions.

Two additional acquisition exceptions also escape wash-sale treatment under the introduced text: assets received through transaction validation (staking or mining rewards already recognized as ordinary income) and assets acquired under a regular periodic purchase plan included in gross income. The bill also creates a no-recognition rule for qualifying digital-asset network or transaction fees not exceeding $10, a provision set to apply to dispositions after December 31, 2027.

Why Wash-Sale Treatment Matters to Investors

The wash-sale rule is one of the more consequential tax changes that could land on crypto portfolios. Unlike the current treatment, which lets investors recycle losses freely through the same positions, the proposed rule would force a genuine holding gap or a pivot to a different asset to preserve the deduction — materially changing year-end tax planning for active traders.

The Ways and Means Committee has been building toward this type of legislation for some time. Its earlier work on crypto tax legislation following the Clarity Act’s setback indicated that applying parity rules to digital assets was already a committee priority, and the 38-5 vote suggests that priority has hardened into consensus. Investors should consult a qualified tax professional regarding how any enacted change might apply to their specific circumstances.

What Comes Next for H.R. 10357

A committee approval sends the bill to the full House for consideration, after which it would need Senate passage and a presidential signature to become law. The wash-sale provision is drafted to cover dispositions after the bill’s introduction date of September 14, 2026, but that framing only becomes operative upon enactment.

The bill’s broad committee margin sets it apart from earlier crypto-related legislation that stalled at comparable stages. The Crypto Clarity Act failed in the Senate, and H.R. 10357’s near-unanimous committee support suggests a more viable path — though Senate floor dynamics and digital-asset industry lobbying remain significant variables to watch.

Final statutory language, an effective date confirmed through enactment, and IRS guidance on what qualifies as a “substantially identical” asset in the crypto context will each shape how the rule operates in practice. Until those questions are resolved, the bill’s real-world impact on crypto tax planning remains contingent on a legislative process that has repeatedly stalled on digital-asset measures.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.