House Proposes Extending Wash Sale Rules to Crypto, Blocks Quick Repurchases Within 30 Days

According to House Budget Chairman Jodey Arrington, on June 17 the House introduced H.R. 9172, the "Applying Existing Tax Anti-Abuse Rules to Digital Assets Act," which would extend wash sale restrictions to cryptocurrency transactions. Under the proposal, investors selling digital assets at a loss would be blocked from claiming that loss if they repurchase a substantially identical asset within 30 days before or after the sale, mirroring rules applied to traditional stocks and securities.

The bill exempts qualified U.S. dollar stablecoins and digital assets acquired through staking, mining, and similar validation activities. It also expands constructive sale rules to crypto, targeting positions worth over $500 million where taxpayers and related parties hold less than 10% ownership. House Ways and Means Committee Chairman Jason Smith stated the change closes tax loopholes that digital asset investors have exploited under existing rules written before crypto emerged.