House Panel Advances Digital-Asset Tax Framework, Limits Remain

The House Ways and Means Committee approved H.R. 10357, the Digital Asset Tax Certainty Act, on Sept. 16 by a 38-5 vote. The committee adopted a substitute from Chairman Jason Smith and ordered the bill favorably reported to the full House for consideration.

The legislation removes gain-or-loss recognition when digital assets are used to pay qualifying network or transaction fees of $10 or less for dispositions after Dec. 31, 2027, provided the asset paying the fee is the same type as the asset involved in the underlying transfer. The bill creates special tax treatment for certain U.S. dollar stablecoins and establishes a simplified accounting election for widely traded digital assets.

H.R. 10357 extends several existing financial-market rules to parts of the crypto sector. It adds lending safe harbors, offers mark-to-market accounting options for eligible dealers and traders, and streamlines tax rules for certain charitable donations of digital assets.

The bill tightens investor rules by applying wash-sale and constructive-sale provisions to digital assets, aligning tax treatment of crypto with rules that already apply to securities and other financial instruments.

On mining and staking, the bill classifies income from digital-asset validation activities as ordinary income and sets sourcing rules based on where the taxpayer or relevant business operation is located. It allows qualifying investment trusts to stake assets without losing trust status solely because of that activity. The package does not include an optional deferral that earlier proposals had proposed, which would have let some miners and validators delay recognizing newly created tokens as income until they were sold.

Industry groups welcomed the committee vote while pressing for more changes. Alison Mangiero, chief strategy officer and head of U.S. policy at the Crypto Council for Innovation, called the committee’s action “a historic step” and urged lawmakers to refine the timing of income recognition for staking and mining rewards and to expand de minimis treatment for ordinary digital-asset transactions. Miles Jennings, head of policy and general counsel at a16z crypto, characterized the bill as offering clearer rules for entrepreneurs and as a possible route for crypto foundations to reorganize under a domestic tax structure.

The bill directs the Treasury Department to issue guidance within 12 months on the tax treatment of foreign entities tied to decentralized autonomous organizations. The guidance must address methods for qualifying foundations to reorganize as domestic corporations and consider potential temporary safe harbors for entities formed before Sept. 14.

After clearing the Ways and Means Committee, H.R. 10357 moves to the full House. Lawmakers and industry groups are expected to seek technical changes on the timing of income recognition for staking and mining rewards and to press for broader de minimis relief for everyday crypto transactions as the bill advances.