Overview
- Republican Rep. Jodey Arrington introduced the Applying Existing Tax Anti-Abuse Rules to Digital Assets Act in June and the bill has picked up support from other Republicans and attention from House Ways and Means leadership.
- The proposal would treat most direct crypto holdings as subject to century-old wash-sale rules that bar claiming a tax loss when an investor buys back a substantially similar asset within 30 days.
- The Treasury estimated in 2024 that extending wash-sale rules to digital assets could boost federal revenue by nearly $24 billion over ten years.
- Some holdings are already affected because they are securities, so bitcoin ETFs and other fund shares likely already face wash-sale limits while direct token holdings would see the biggest change.
- Lawmakers and tax experts say the measure adds clarity and enforcement for digital-asset taxes, but near-term passage is unlikely before the midterm elections and the push has already introduced short-term investor uncertainty that could alter trading and market pricing.