Does the Wash-Sale Rule Apply to Crypto in 2026? The Digital Asset Tax Certainty Act, Explained

Last updated: October 2026 · 10 min read

For years, crypto investors have enjoyed a tax quirk that stock investors could only envy: sell a coin at a loss, buy it right back, and claim the deduction anyway. That quirk exists because the wash-sale rule, by its terms, covers only stocks and securities — and crypto is treated as property. On September 16, 2026, Congress took its most serious step yet toward closing that gap. This guide explains the current law, what the new bill would change, and — critically — what has not become law yet.

1. Does the wash-sale rule apply to crypto today?

As of this writing, no — with one important exception. The wash-sale rule (IRC Section 1091) disallows a loss deduction when you sell stock or securities at a loss and buy back substantially identical stock or securities within the 61-day window (30 days before through 30 days after the sale). The IRS classifies convertible virtual currency as property for federal tax purposes (IRS Notice 2014-21), not as stock or securities. So under current law, selling spot crypto at a loss and quickly repurchasing it does not trigger the automatic disallowance that a stock trader would face.

The exception: crypto exposure held through securities. Shares of crypto companies and, in some cases, spot crypto ETF shares are securities — the wash-sale rule applies to those normally. The treatment of spot ETF shares specifically remains unsettled, so treat them with caution. Our tax-loss harvesting guide covers how harvesting works under today's rules.

2. What happened on September 16, 2026

At a markup hearing, the House Ways and Means Committee ordered the Digital Asset Tax Certainty Act (H.R. 10357) favorably reported to the full House, as amended by an Amendment in the Nature of a Substitute offered by Chairman Jason Smith. The roll-call vote was 38 yeas to 5 nays — a strongly bipartisan margin. The committee's official markup record confirms the vote, the bill number, and the substitute amendment. The 114-page bill had been released two days earlier, on September 14.

Chairman Smith described it as the first federal legislation establishing substantive tax treatment for digital assets, following more than a year of bipartisan work. Coverage of the markup (Unchained, CoinDesk, Digital Watch Observatory) reports that the bill bundles several long-standing industry asks: paperwork relief, mining and staking treatment, charitable giving, accounting rules, and anti-abuse measures.

3. What the Digital Asset Tax Certainty Act would change

The following is based on media coverage of the bill text as amended at markup — the full text and the Joint Committee on Taxation's revenue and description documents are linked on the committee's markup page. If enacted in this form, the bill would:

• Extend wash-sale rules to digital assets. For the first time, selling crypto at a loss and buying back substantially identical assets within the 30-day window before or after the sale would delay or disallow the loss deduction — the same treatment stocks have always had. Coverage reports that as drafted, the provision applies to sales after September 14, 2026 — the date the bill was introduced — which is why late-2026 harvest-and-rebuy strategies are already in the spotlight.
• Extend constructive-sale rules to digital assets. Investors who hedge a position with offsetting transactions (such as short sales against a long crypto position) would face the constructive-sale treatment that already applies to stocks, treating the position as sold for tax purposes.
• Exempt small transaction fees from gain-or-loss reporting. Blockchain network and transaction fees of $10 or less would be exempt — sparing users from tax accounting on routine payments. Coverage notes the exemption would not apply to a person who engaged in more than 5,000 transfers in the prior year.
• Give qualifying dollar-backed stablecoins special treatment. Qualifying U.S. dollar stablecoins trading near their redemption value would be excluded from the wash-sale and constructive-sale rules, among other favorable treatments — so ordinary stablecoin usage would not generate a maze of tiny gains and losses.
• Classify mining and staking rewards as ordinary income. The bill would settle the long-running debate by treating mining and staking rewards as ordinary income on receipt. Notably, an earlier proposal that would have let miners and stakers defer tax on unique tokens was stripped from the final text.
• Let crypto investment trusts stake without losing tax status. Consistent with the IRS's own Revenue Procedure 2026-20 guidance issued October 6, qualifying crypto investment trusts could stake proof-of-stake assets without jeopardizing their trust tax status.
• Treat qualifying crypto loans as non-taxable. Loans using crypto as collateral would not be treated as sales, removing one of the murkiest areas of DeFi tax accounting.
• Simplify accounting and add a voluntary disclosure program. Simplified accounting rules for gains and losses on widely traded digital assets, plus a voluntary disclosure program that would let eligible taxpayers correct past returns.

Again: none of this is enacted. But the package shows where the law is heading, and the September 14 effective date in the draft is exactly the kind of retroactive-style detail that rewards early preparation.

4. What is NOT law yet — and why that matters

The bill faces a crowded and skeptical calendar. Coverage in mid-October 2026 noted that Congress is heading into a lame-duck session with roughly five weeks of scheduled work between the November elections and the start of the next Congress in January — and that crypto tax measures are not high on the must-pass list. One prominent industry supporter, Senator Cynthia Lummis (R-WY), publicly voiced doubt about the odds of moving a tax bill this year. On the Senate side, Senator Steve Daines (R-MT) introduced a related draft addressing stablecoin payments and wash-sale extensions, but a Senate companion is not the same as Senate passage.

That uncertainty cuts both ways. If the bill dies in this Congress, the current harvest-and-rebuy playbook remains valid — and investors who abandoned it prematurely would have left money on the table. If it passes with the September 14 effective date intact, loss sales with rebuys executed after that date could face disallowance. Both outcomes argue for the same posture: document everything now, decide later.

5. What crypto investors should do before year-end

1. Do not change your 2026 strategy based on a pending bill. Current law is current law. Harvesting losses — including harvesting with a repurchase — remains valid under today's rules. Our free tax-loss harvesting estimator models your savings from your own numbers.
2. Document every harvest and rebuy with timestamps. For any loss sale after September 14, 2026, record the sale date, the asset, the proceeds, and the exact date and time of any repurchase. If the bill becomes law with the September 14 date intact, this documentation is what lets you — and your tax preparer — reconstruct which losses were disallowed.
3. Consider separating harvests from rebuys. Until the legislative picture clears, one clean approach is to harvest losses in 2026 but hold off on repurchasing the identical asset until there is clarity — or rotate into a different asset to maintain market exposure without touching the 30-day window.
4. Use the year-end window intentionally. Harvesting must happen in 2026 to count for 2026. The full harvesting guide covers lot identification, wallet-by-wallet accounting, and the Notice 2026-20 grace period that expires December 31.
5. Watch the House floor vote. A full-House vote is the next real milestone. If the bill passes the House, its odds improve meaningfully; if it stalls there, the pressure for urgent changes drops.
6. Talk to a tax professional before executing quick-repurchase strategies late in the season. The interplay between the pending bill, the unsettled ETF-share treatment, and your personal tax situation is exactly the kind of question a preparer should answer.

Frequently asked questions

Is the wash-sale rule in effect for crypto right now?

No. As of October 2026, the wash-sale rule (IRC Section 1091) still covers only stocks and securities, and the IRS treats spot crypto as property — so selling crypto at a loss and buying it back does not trigger the automatic disallowance. The Digital Asset Tax Certainty Act would change this, but it has only passed committee, not the full House, Senate, or the President.

What does the 30-day wash-sale window mean?

Under the classic securities rule, a loss is disallowed if you sell at a loss and buy substantially identical assets within 30 days before or after the sale (a 61-day window). The bill would apply the same mechanics to digital assets — including the "substantially identical" test, which is why rotating into a different token is cleaner than repurchasing the same one.

Would stablecoins be affected by the new wash-sale rules?

No, per coverage of the bill text: qualifying U.S. dollar stablecoins trading near redemption value would be excluded from the wash-sale and constructive-sale provisions. The rules are aimed at volatile traded assets, not dollar-pegged tokens used for payments and settlement.

Are mining and staking rewards affected by this bill?

The bill addresses them directly: mining and staking rewards would be classified as ordinary income on receipt. An earlier proposal that would have allowed deferral of tax on unique tokens was removed, so the drafted version imposes tax liability when rewards hit the wallet. See our staking and mining income guide for the reporting mechanics under current law.

Should I stop tax-loss harvesting because of this bill?

No — harvesting remains fully valid under current law, and only 2026 dispositions count for your 2026 return. The prudent approach is to keep harvesting, document every sale and rebuy with timestamps, and consider separating rebuys from sales (or rotating into a different asset) until the legislative picture clears. A tax professional can help you decide how much to weight the pending-bill risk.

Sources

• House Ways & Means Committee: Markup record for H.R. 10357 (Sept. 16, 2026) — 38 yeas, 5 nays
• Unchained: House Panel Advances Crypto Tax Bill That Would Limit Certain Loss Write-Offs
• CoinDesk: U.S. House's Tax Committee Advances Crypto Tax Bill
• Digital Watch Observatory: US Lawmakers Advance Digital Asset Tax Certainty Act
• IRS: Notice 2014-21 (virtual currency treated as property)
• IRS: Publication 550 (wash-sale rules, ch. 4)

Keep learning

• Crypto Tax-Loss Harvesting in 2026: A Year-End Guide
• IRS Revenue Procedure 2026-20: Crypto Trust Staking Safe Harbor
• Form 1099-DA Basis Reporting in 2026
• Form 8949: The Complete Guide
• Tax-Loss Harvesting Estimator
• Free Crypto Tax Calculator