crypto tax legislation digital asset tax certainty act Oct 15, 2026

Digital Asset Tax Certainty Act: What H.R. 10357 Would Change for Crypto Investors

By Clinton Donnelly, LLM, EA, Founder of CryptoTaxAudit

Congress finally has a crypto tax bill with real weight behind it. And it cuts both ways.

The Digital Asset Tax Certainty Act (H.R. 10357) was introduced on September 14, 2026, by Rep. Jason Smith of Missouri, chairman of the House Ways and Means Committee, the committee that writes tax law. It has eight cosponsors from both parties.

The bill hands crypto investors some long-overdue fixes. Your $2 gas fee wouldn’t be a taxable event. Stablecoins would get sane rules, and so would worthless tokens. But it also closes the wash sale loophole that crypto investors have relied on for years. And if the bill passes as written, that change reaches back to the day it was introduced.

My take: this is the most serious crypto tax bill we’ve seen. Here is what’s in it, and what it means for you.

Key Takeaways

Wash sales would apply to crypto. The rule would cover sales made after September 14, 2026, if the bill becomes law as written.
Small fees would stop being taxable. Network and transaction fees of $10 or less would no longer trigger gain or loss, starting in 2028.
Stablecoins would get simple rules. No more tracking pennies of gain on USDC-type coins, starting in 2027.
There’s an optional mark-to-market method. Investors could choose to tax major coins once a year, but every gain would be short-term.
Worthless tokens would get a clear loss. A token that goes to zero would be treated as sold on the last day of the year.
A new crypto amnesty program. The bill creates a voluntary disclosure program with penalties as low as 0%.
Staking timing is not fixed. The bill labels validation income as ordinary, but doesn’t say when rewards are taxed.

What Is the Digital Asset Tax Certainty Act?

H.R. 10357 is a broad rewrite of how the tax code treats digital assets. It runs seven titles, covering:

everyday payments,
parity with stocks,
anti-abuse rules,
mining and staking,
broker reporting and voluntary disclosure,
definitions,
a separate provision on gambling losses.

The theme is simple. Treat crypto more like stocks and securities, for better and for worse.

It is only a proposal. The bill has been referred to Ways and Means, and nothing changes until it passes both chambers and is signed. But a bill from the chairman of the tax-writing committee is not a messaging bill. Pay attention to it.

The Bad News First: Wash Sales Come to Crypto

Today, the wash sale rule applies only to stocks and securities. Crypto investors can sell a coin at a loss, buy it right back, and still claim the loss. It’s one of the most valuable year-end tools crypto investors have.

Section 301 ends that. The wash sale rule would apply to “traded digital assets,” with stablecoins excluded. Wrapped or tokenized versions of the same asset would count as substantially identical.

There are two sensible exceptions:

tokens you receive from validating, meaning staking or mining,
regular, periodic acquisitions you report as ordinary income.

Here’s the part that gets me. The rule would apply to “dispositions after the date of the introduction of this Act.” That’s September 14, 2026. If the bill passes in this form, a loss you harvest this fall could be disallowed after the fact. The same effective date applies to the new constructive-sale rules in Section 302.

What I’m telling clients:

if you plan to harvest crypto losses this year, talk to us before you buy back in. Waiting more than 30 days to rebuy is the cautious path while this bill is pending.

Relief for Everyday Crypto Use

De minimis fees (Section 101).

Every time you pay a gas fee in ETH, you technically sell ETH. That means a gain or loss calculation on a few dollars. Under the bill, network fees and transaction fees of $10 or less would no longer be taxable. The rule starts with dispositions after December 31, 2027.

To be clear, this covers fees only. It is not the small-purchase exemption many people hoped for. Buying a coffee with crypto would still be a taxable sale. Traders, brokers, dealers and anyone with more than 5,000 transfers in the prior year are excluded.

Optional mark-to-market (Section 102).

For “widely traded” digital assets, you could elect to report one net gain or loss per coin type each year, using year-end value. No more lot-by-lot tracking.

The catch: every dollar of gain would be short-term, taxed at ordinary rates. And once you elect, you’re locked in for five years. Long-term holders would usually lose money on this. Active traders might find it worth it. It starts with tax years beginning after December 31, 2027.

Trader status (Section 202).

Dealers and traders in digital assets could make the same mark-to-market election under Section 475 that securities traders use today. That means ordinary losses instead of capital losses.

Charitable gifts (Section 204).

Certain digital asset donations would no longer need a qualified appraisal. Some coins would be denied a deduction for the gift itself. Instead, you’d sell the coin and donate the proceeds within seven days, or by year-end, without recognizing the gain.

Foreign investors and Puerto Rico (Sections 203 and 304).

A new safe harbor protects foreign investors trading crypto for their own account in the U.S. Separately, new sourcing rules cover crypto gains for residents of Puerto Rico and other U.S. territories, with reporting above $10,000. If you moved to Puerto Rico for crypto, read this section closely.

Stablecoins, Worthless Tokens and Lending

Stablecoins (Section 103).

A qualified U.S. dollar stablecoin would be treated as worth its redemption value, $1, as long as your price was within 99.5% to 100.5% of that value. In plain English, no more tiny gains and losses every time you move in and out of a stablecoin. This would start in tax years beginning after December 31, 2026.

Worthless tokens (Section 306).

When a token goes to zero, today’s rules for claiming the loss are murky. The bill treats a worthless digital asset as sold on the last day of the tax year. That gives you a clean capital loss.

Crypto lending (Sections 201 and 307).

Lending crypto under a qualifying agreement wouldn’t be a taxable sale, the same as stock lending today. Stablecoin loans would be treated as debt.

A Crypto Amnesty Program

This is the provision I find most important for the people we talk to every week.

Section 502 orders the IRS to set up a digital asset voluntary disclosure program within 12 months of enactment. You file amended returns for the affected years, pay the tax and interest, and pay a one-time penalty instead of the usual accuracy and fraud penalties.

There are two tracks:

Certified: you swear under penalty of perjury that nothing was willful or fraudulent. The look-back covers up to 3 years.

Uncertified: you make no such statement. The look-back covers up to 6 years, but you get protection from criminal referral for what you properly disclose.

Amended returns filed	Certified	Uncertified
Within 12 months of launch	0% on the first $25,000 of tax per year, 5% above	25% on the first $25,000, 40% above
After 12 months	5% on the first $100,000, 10% above	40% on the first $25,000, 50% above

For a non-willful investor who simply didn’t know how to report crypto, a 0% penalty on the first $25,000 a year is remarkable. It’s far better than what the IRS offers today.

Note one trade-off. Taxes disclosed in the program can be assessed even if the normal statute of limitations has run. If you’re in this situation, the right choice between certified and uncertified matters a great deal. Don’t make it alone.

What It Doesn’t Fix: Staking

The bill says income from validation activities, meaning staking and mining, is ordinary income, and sets rules for where that income is sourced. It does not say when staking rewards are taxed.

After the Tax Court’s ruling in Paschall v. Commissioner, the IRS view stands: rewards are taxable when you gain control of them. Stakers who hoped for “tax it when you sell it” treatment won’t find it here. The bill does order a Treasury study on withholding and reporting for staking, due by September 30, 2028.

Frequently Asked Questions

Is the Digital Asset Tax Certainty Act law?

No. It was introduced on September 14, 2026, and referred to the House Ways and Means Committee. It must pass the House and Senate and be signed before anything changes.

Should I stop harvesting crypto losses?

Not necessarily. But because the wash sale rule could reach back to September 14, 2026, rebuying the same coin within 30 days carries new risk. Talk to a crypto tax professional before you do it.

Does the bill exempt small crypto purchases?

No. The $10 exemption covers network and transaction fees only. Buying goods with crypto would still be a taxable sale.

Would the mark-to-market election lower my taxes?

Usually not for long-term holders, since all gains become short-term. It may help very active traders who value the simplicity.

What if I haven’t reported crypto in past years?

The bill’s voluntary disclosure program could be a powerful option if it passes. Even today, there are ways to get compliant. The best path depends on your facts.

When would most provisions take effect?

It varies. The wash sale and constructive sale rules apply from the date of introduction. The stablecoin rules start in 2027. The de minimis fee exemption and the simplified accounting method start in 2028.

What is the “Full House Act” in Title VII?

Title VII would reinstate the prior rules for deducting gambling losses. It’s unrelated to crypto, but it rides along in the same bill.

I break down tax and policy moves like this on The Clinton Donnelly Show. If you’re a crypto investor and want to know how this bill could affect your crypto taxes, book a consultation with our team.

About CryptoTaxAudit: Founded in 2015 by Clinton Donnelly (LLM, EA), CryptoTaxAudit specializes exclusively in cryptocurrency tax preparation and IRS audit defense. Clinton holds an advanced law degree in international financial planning, federal Enrolled Agent status, and the Certified Cryptoasset Anti-Financial Crime Specialist credential from ACAMS. The firm has filed more than 5,000 crypto tax returns, defended clients in over 50 IRS audits, and represented five traders in U.S. Tax Court. CryptoTaxAudit tracks the federal tax and policy moves that affect crypto investors, including proposals like the Digital Asset Tax Certainty Act.

Source: H.R. 10357, Digital Asset Tax Certainty Act, text as introduced