The crypto wash sale rule moved from talking point to bill text on September 16, 2026, when the House Ways and Means Committee advanced H.R. 10357 by a 38-5 vote. The bill applies the 30-day wash sale test to digital assets and scores at roughly $1.71 billion of revenue through 2036. Until it clears both chambers, crypto losses remain harvestable the same day.
What is the crypto wash sale rule, and what did the House just do?
A crypto wash sale rule would block you from claiming a tax loss on a digital asset if you buy a substantially identical asset within 30 days before or after the sale. On September 16, 2026, the House Ways and Means Committee approved exactly that, 38-5, inside the Digital Asset Tax Certainty Act.
The committee’s own announcement says the bill “applies existing tax anti-abuse rules to digital assets – including the ‘wash sale’ and ‘constructive sale’ rules.”
That single sentence ends the most valuable structural advantage crypto has over stocks in a US taxable account.
The vote landed less than 24 hours after the Senate’s Clarity Act push failed a procedural vote on September 15, per CoinDesk’s policy desk. One crypto bill died; another advanced the same week.
The package is broader than wash sales. The main provisions, per the committee release and the bill text summary:
- Wash sale and constructive sale rules extended to traded digital assets, with the standard 30-day window on either side of the sale.
- A $10 de minimis exemption for qualifying network or transaction fees paid in crypto, effective 2028.
- Taxpayers with more than 5,000 digital asset transfers in the prior tax year are excluded from that exemption.
- Mining and staking rewards keep ordinary income treatment; the deferral-until-sale option the industry lobbied for is not in the bill.
- Certain investment trusts may stake holdings without jeopardizing their tax status.
- Qualifying US dollar stablecoins get relief for small deviations from the $1 peg, and some stablecoin lending is treated as debt.
- Treasury must stand up a Digital Asset Voluntary Disclosure Program within 12 months of enactment.
The date to write down is September 14, 2026
H.R. 10357 was introduced September 14, 2026 by Representative Jason Smith of Missouri, per the GovInfo record. The substitute amendment adopted in markup uses that same date as the reference point for the wash sale provisions.
Reference dates in tax bills are not decoration. They tell you which side of the line a transaction would fall on if the text survives to enactment.
Why doesn’t the wash sale rule apply to crypto today?
Because the statute covers “stock or securities,” and the IRS does not treat digital assets as either. The IRS digital assets page states plainly: “For U.S. tax purposes, digital assets are considered property, not currency.” Property sits outside the wash sale section entirely.
That classification traces back to Notice 2014-21 and was never updated to pull crypto into the anti-abuse rules. Everything else about crypto taxation followed the securities playbook anyway.
You report dispositions on Form 8949 and Schedule D, exactly as with stocks. Custodial brokers have filed Form 1099-DA for transactions occurring on or after January 1, 2025, under the reporting regime the Infrastructure Investment and Jobs Act created.
So the paperwork already looks like equities. Only the loss rules diverge. That asymmetry is what the House just voted to remove.
Crypto vs stocks: which tax rules actually differ?
Fewer than most investors assume. Rates, loss limits and reporting forms are already aligned. The gap is narrow but valuable: the wash sale and constructive sale rules apply to your S&P 500 ETF and not to your bitcoin. H.R. 10357 closes that gap and leaves the rest untouched.
| Rule | Stocks and ETFs today | Crypto today | Crypto under H.R. 10357 |
|---|---|---|---|
| Wash sale (30 days before or after) | Applies | Does not apply | Applies |
| Constructive sale rules | Apply | Do not apply | Apply |
| Disallowed loss | Added to basis of replacement | Not applicable | Added to basis of replacement |
| Long-term capital gains rate | 0%, 15% or 20% | 0%, 15% or 20% | Unchanged |
| Short-term gains | Ordinary income rates | Ordinary income rates | Unchanged |
| Net capital loss vs ordinary income | $3,000 per year | $3,000 per year | Unchanged |
| Broker reporting form | 1099-B | 1099-DA since Jan 1, 2025 | 1099-DA |
| Staking or mining rewards | Not applicable | Ordinary income | Ordinary income, no deferral |
Note what does not change. The $3,000 annual cap on net capital losses deducted against ordinary income stays, per IRS Topic No. 409, with the excess carried forward indefinitely.
What is a $10,000 crypto loss actually worth at tax time?
Less than the harvesting pitch implies, and it depends entirely on your marginal rate and whether you have gains to offset. A $3,000 realized loss saves $720 at a 24% marginal rate and $1,110 at 37%. That is the whole arithmetic, and it is a deferral, not a rebate.
Work it through. Say you put $10,000 into bitcoin and the position is now worth $7,000. Bitcoin traded at $75,981.82 on September 16, 2026, per CoinGecko, so drawdowns of that size are not hypothetical this month.
Under today’s rules you sell, realize a $3,000 short-term loss, and rebuy immediately. Your exposure never changes. Your tax bill does.
| Marginal rate on the offset income | Arithmetic | Cash tax deferred |
|---|---|---|
| 24% | $3,000 × 0.24 | $720 |
| 32% | $3,000 × 0.32 | $960 |
| 37% | $3,000 × 0.37 | $1,110 |
| 37% plus 3.8% net investment income tax | $3,000 × 0.408 | $1,224 |
Harvesting is a deferral, not a discount
When you rebuy at $7,000, your cost basis drops from $10,000 to $7,000. Every future dollar of recovery above $7,000 is now taxable gain that would previously have been tax-free recovery of your original capital.
You have not erased $960 of tax. You have moved it into the future.
The real value is the time value of that money. Deferring $960 for five years at a 4% annual return compounds to $1,168, a gain of roughly $208. Useful. Not transformative.
Anyone selling crypto tax-loss harvesting as free money is quoting the $960 and skipping the basis adjustment. The same caution applies to the cost comparisons we ran on MSTR versus IBIT as bitcoin exposure, where the wrapper determines how flexible your tax lots are.
How much would a 31-day wait cost you?
That is the question the bill forces. Under a wash sale regime, keeping the deduction means staying out of the asset for 31 days, and in crypto that is a meaningful exposure gap. Bitcoin’s 24-hour range on September 16, 2026 ran from $75,038 to $76,901, a 2.5% swing in a single session, per CoinGecko.
Equity investors solved this decades ago by rotating into a similar but not substantially identical fund for the window.
Crypto has no settled equivalent. Bitcoin and ether are obviously not substantially identical. Bitcoin and a spot bitcoin ETF are a genuinely open question, and the committee documents do not resolve it.
That ambiguity is the part investors should watch, not the headline. A rule that applies cleanly to equities can be messy when the same economic exposure exists in four wrappers at once, a problem we flagged when comparing a Solana staking ETF against staking the token directly.
Who gains and who loses under the crypto wash sale rule?
Long-term holders barely notice. Active traders who harvest losses on every drawdown lose their best tool. Stakers and miners get clarity but no deferral. The stablecoin payment crowd gets an exemption in 2028 that excludes anyone who actually transacts frequently.
| Investor profile | What changes | What to check |
|---|---|---|
| Buy-and-hold BTC or ETH holder | Little, unless you harvest losses in drawdowns | Whether your lots are tracked by specific identification |
| Active trader, under 5,000 transfers | Loses same-day repurchase harvesting | Which non-identical asset covers the 31-day window |
| High-frequency trader, over 5,000 transfers | Loses harvesting and is barred from the $10 fee exemption | The prior-year transfer count that triggers exclusion |
| Staker or miner | Ordinary income at receipt is confirmed; no deferral | Cash to cover tax on tokens you have not sold |
| ETF or trust holder | Trusts may stake without losing tax status | Whether your fund adds staking and how it distributes |
| Stablecoin user | Peg-deviation relief and $10 fee exemption from 2028 | Whether your activity clears the 5,000-transfer bar |
Is the $10 fee exemption worth anything?
On the revenue math, it is the most expensive line in the bill and the least likely to reach the people it was written for. The fee exemption scores at roughly -$2.37 billion over fiscal 2027 to 2036, while the wash sale change raises about $1.71 billion. The full package nets around $500 million.
Read that structure carefully. Congress is funding a consumer-facing exemption partly by closing a trader-facing loophole.
And the exemption carves out anyone with more than 5,000 digital asset transfers in the prior tax year. Those are precisely the wallets generating the flood of small-dollar reports the committee complained about, noting the IRS received hundreds of millions of 1099-DA forms in 2025, many for transactions under $10.
An exemption designed to kill micro-transaction paperwork excludes the biggest micro-transaction users. It does not take effect until 2028 either.
Will the crypto wash sale rule become law this year?
A 38-5 committee vote is real bipartisan momentum and still a long way from enactment. The calendar is the binding constraint: roughly five weeks of congressional working time remain between the November elections and January’s new session, and the Senate just demonstrated how crypto bills die there.
The Clarity Act failed its procedural Senate vote on September 15, 2026. The market noticed immediately.
US spot bitcoin ETFs posted $450.4 million of net outflows on September 15, according to Farside Investors data, with Fidelity’s FBTC down $214.8 million and BlackRock’s IBIT down $161.7 million. CoinDesk called it the largest single-day outflow since June.
Farside’s cumulative tally still shows roughly $54.9 billion of net inflows since launch, so one bad session is noise against the trend. But it shows how tightly the ETF complex now trades on Washington headlines, a dynamic we tracked when ranking the cheapest bitcoin ETFs of 2026.
Crypto wash sale rule FAQ
Can I still sell crypto at a loss and rebuy the same day?
As of September 16, 2026, yes. The wash sale rule in the tax code applies to stock or securities, and the IRS classifies digital assets as property. H.R. 10357 would change that, but it has only cleared committee.
How long is the wash sale window?
Thirty days before the sale and 30 days after it, a 61-day window in total, per IRS Publication 550. Buying a substantially identical asset inside that window disallows the loss for that tax year.
Is a disallowed loss gone forever?
No. Publication 550 explains that the disallowed loss is added to the cost basis of the replacement position, and the original holding period carries over. You recover the benefit when you finally sell the replacement.
How much crypto loss can I deduct against my salary?
Net capital losses offset capital gains first. Beyond that, IRS Topic No. 409 caps the deduction against ordinary income at $3,000 per year, or $1,500 if married filing separately, with the remainder carried forward indefinitely.
Would swapping bitcoin for a bitcoin ETF avoid the rule?
Unclear, and that is the honest answer. “Substantially identical” has decades of case law for equities and none for spot crypto versus its ETF wrapper. The committee materials do not address it.
Does the bill change how staking rewards are taxed?
It clarifies rather than reduces. Mining and staking rewards remain ordinary income at receipt, and the deferral-until-sale option the industry sought was left out. Certain investment trusts may stake without endangering their tax treatment.
When would the changes take effect?
The substitute amendment uses September 14, 2026 as the reference date for the wash sale provisions. The $10 fee exemption and the simplified annual accounting option are written for 2028. None of it applies unless the bill is enacted.
The bottom line
The crypto wash sale rule is not law yet, and the odds this Congress passes it before January are poor. But the 38-5 vote on September 16, 2026 means the loophole now has an expiration date attached to it rather than an open horizon.
Here is the decisive read. If your marginal rate is 32% or higher and you hold crypto below cost, the same-day repurchase is worth real cash today and measurably less once a 31-day wait is attached to it.
If your marginal rate is 24% or below, a $3,000 loss is worth $720 of deferral and a permanently lower basis. That is a smaller prize than the harvesting industry advertises, and it depends on having gains to offset in the first place.
The skeptical note stands: this bill funds a $2.37 billion consumer exemption partly with $1.71 billion taken from traders, then excludes the heaviest transactors from the consumer side. That is a tidy piece of scoring, not a coherent policy for how people actually use crypto. For the cash side of the same portfolio question, our comparison of DeFi yield against Treasury bills covers where the after-tax math lands.
This article is journalism, not investment advice. Do your own research before investing.
Sources
- House Ways and Means Committee — Historic Digital Asset Tax Legislation Advances (September 16, 2026)
- GovInfo — H.R. 10357, Digital Asset Tax Certainty Act (introduced September 14, 2026)
- IRS — Digital Assets
- IRS Publication 550 — Investment Income and Expenses (Wash Sales)
- IRS Topic No. 409 — Capital Gains and Losses
- Farside Investors — Bitcoin ETF Flow
- CoinDesk — House tax committee advances crypto tax bill (September 16, 2026)
- The Block — House committee releases sweeping crypto tax bill
- CoinGecko — Bitcoin price data (September 16, 2026)
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