Wire
Crypto traders could lose a tax loophole on quick resets
Rep. Jodey Arrington’s House bill would put digital assets under the same anti-abuse rules that already apply to stocks. It also spells out an exception for qualified U.S. dollar stablecoins.
In the U.S. House, a tax bill would take aim at one of crypto trading’s easiest tax moves. If it became law, digital assets would be treated more like stocks for two anti-abuse rules, making it harder for investors to sell at a loss and buy back in right away without losing the tax benefit.
For traders who have used that strategy to harvest losses in volatile markets, the practical effect could be immediate: less room to lower a tax bill while keeping the same market exposure.
What the rules would do
Wash sale rules are designed to stop someone from claiming a loss on an asset they effectively still hold. Under current law, those rules reach stocks and securities. H.R. 9172 would expand the Internal Revenue Code’s definition of a covered asset to include digital assets, so a quick sell-and-rebuy of crypto would no longer slip through the same gap.
The bill would also apply constructive sale rules to digital assets. That rule is a separate anti-gaming tool that treats a position as closed out for tax purposes when the investor has effectively removed the economic risk, even if the trade has not been unwound in form.
The stablecoin exception
The bill does not sweep in every token. Qualified U.S. dollar stablecoins would be excluded from the digital-asset definition, leaving them outside the new wash sale and constructive sale treatment described in the measure.
That carveout matters because the bill is aimed at a specific trading behavior, not at every corner of the crypto market. If enacted, it would mainly force digital-asset investors, tax preparers and trading platforms to rethink how losses are recorded and reported when positions are turned over quickly.