The House Ways and Means Committee advanced legislation on September 16 to establish a federal tax framework for digital assets. The committee passed H.R. 10357, known as the Digital Asset Tax Certainty Act, by a vote of 38-5, marking the first cryptocurrency tax bill to clear a congressional committee.
The legislation aims to reduce tax friction for routine crypto transactions while extending existing anti-abuse regulations from traditional finance to digital assets. These include wash-sale rules, constructive-sale rules, and mark-to-market accounting requirements.
Key Provisions
Under the bill, users would not recognize gains or losses when paying qualifying network or transaction fees of $10 or less. This exemption applies to dispositions after December 31, 2027, though the provision has limitations. The Joint Committee on Taxation estimated this provision at approximately $2.5 billion in revenue impact.
The legislation also requires the Treasury Department to establish a Digital Asset Voluntary Disclosure Program within one year, allowing eligible taxpayers to modify past returns and settle taxes, interest, and penalties.
Mining and Staking Treatment
An earlier draft allowed taxpayers to defer income from mining and staking rewards. The current version removes this deferral option and establishes rewards as ordinary taxable income, though the bill does not specify the timing for recognizing that income. The legislation does permit certain investment trusts to stake virtual assets without compromising their tax status.
Revenue Impact and Criticism
The Joint Committee on Taxation estimates the overall package generates approximately $500 million in net federal revenue over 10 years, including roughly $2 billion in lost revenue from reversing a gambling-loss deduction limit. Rep. Lloyd Doggett criticized the measure as providing billions in tax breaks for the crypto industry, while the Tax Foundation argued that tax reform should maintain neutrality between digital and traditional investments.
Committee Chairman Jason Smith described the markup as historic and the result of over a year of bipartisan work. The bill now advances to the full House for consideration.
