What does Preamble of Applying Existing Tax Anti-Abuse Rules to Digital Assets Act do?

This bill proposes to amend the Internal Revenue Code of 1986. The amendment aims to apply wash sale rules and constructive sale rules to digital assets. The bill was introduced in the House of Representatives on June 8, 2026.

What does SHORT TITLE; ETC. of Applying Existing Tax Anti-Abuse Rules to Digital Assets Act do?

This Act is formally titled the "Applying Existing Tax Anti-Abuse Rules to Digital Assets Act". The Act amends or repeals sections of the Internal Revenue Code of 1986.

What does APPLICATION OF WASH SALE RULES TO DIGITAL ASSETS. of Applying Existing Tax Anti-Abuse Rules to Digital Assets Act do?

This section amends Section 1091 of the Internal Revenue Code to expand the application of wash sale rules to digital assets. It defines 'specified asset' to include any stock or security, and any digital asset other than a qualified U.S. dollar stablecoin. The definition of 'specified asset' also includes contracts or options to acquire or sell such assets. Tokenized digital assets are treated as substantially identical to economically equivalent stocks, securities, or digital assets. An exception is created for digital assets acquired in connection with the validation of digital asset transactions. Several sections of the Internal Revenue Code are amended to replace references to 'stock or securities' with 'specified assets'. The amendments apply to dispositions after the date of the Act's introduction. A transition rule allows for broker reporting adjustments for digital asset sales before January 1, 2028, where the amendments would otherwise apply.

What does APPLICATION OF CONSTRUCTIVE SALE RULES TO DIGITAL ASSETS. of Applying Existing Tax Anti-Abuse Rules to Digital Assets Act do?

This section amends Section 1259(b)(1) to include 'digital asset (other than a qualified U.S. dollar stablecoin)' alongside 'debt instrument'. Section 1259(c)(2) is amended to include 'or widely traded digital asset' after 'marketable security'. A new paragraph (5) is added to Section 1259(c) to treat tokenized digital assets as substantially identical to economically equivalent financial property like stock, debt instruments, or partnership interests. Section 1259(e) is amended to add a new paragraph (4) addressing qualified U.S. dollar stablecoins and functional currency other than the dollar. The amendments made by this section apply to constructive sales after the date of the introduction of this Act.

What does DEFINITIONS. of Applying Existing Tax Anti-Abuse Rules to Digital Assets Act do?

This section amends Section 7701 of the Internal Revenue Code to include definitions related to digital assets. It defines 'digital asset' as any digital representation of value recorded on a distributed ledger, subject to Secretary's discretion. A 'traded digital asset' is defined as fungible, with readily available quotations, and not a tokenized digital asset or a wrapped digital asset referencing a traded digital asset. A 'widely traded digital asset' requires quotations available throughout the year, a market capitalization exceeding $500,000,000, and limited ownership by any taxpayer. The Secretary has authority to adjust requirements for identifying traded digital assets and exclude assets lacking reliable price discovery. The $500,000,000 threshold for widely traded digital assets will be adjusted for inflation after 2027. A 'tokenized digital asset' is defined as one where a significant portion of value is not related to the distributed ledger, excluding qualified U.S. dollar stablecoins. A 'wrapped digital asset' is defined as redeemable on demand for another digital asset. The term 'qualified U.S. dollar stablecoin' is defined based on the GENIUS Act. The Secretary may treat qualified U.S. dollar stablecoins as dollars and other stablecoins as currency to increase federal revenues.

What does RULES OF CONSTRUCTION. of Applying Existing Tax Anti-Abuse Rules to Digital Assets Act do?

This section establishes rules of construction for the Act. It states that nothing in the Act should be construed to create an inference about whether a digital asset is a security, commodity, or other financial instrument. The Act clarifies that its provisions should not create inferences regarding the application of the Internal Revenue Code of 1986 to periods before the Act's effective date.

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Applying Existing Tax Anti-Abuse Rules to Digital Assets Act

Last updated: 6/8/2026 · Introduced: 6/8/2026

Author: Jodey Arrington (R-TX)

TL;DR (AI)

This bill expands existing tax rules related to wash sales to include digital assets, excluding qualified U.S. dollar stablecoins, to prevent tax avoidance strategies.
The bill applies constructive sale rules to digital assets, treating tokenized digital assets as economically equivalent to stocks and other financial property.
The legislation establishes new definitions within the Internal Revenue Code for various digital asset types, including 'traded digital assets,' 'widely traded digital assets,' and 'tokenized digital assets,' with inflation adjustments for certain thresholds.

119th Congressin committeeOfficial page

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