Ways and Means Committee Approves Crypto Tax Bill

On September 16, the House Ways and Means Committee approved, on a bipartisan 38 to 5 vote, H.R.10257, the Digital Asset Tax Certainty Act (DACTA). The bill was introduced by the committee’s chairman, Rep. Jason Smith (R-MO), with eight cosponsors who serve on the committee, including one Democrat (Rep. Stephen Horsford (D-NV)).

Generally, the bill would:

• Exempt small “everyday” purchases and network/transaction fees of $10 or less from capital gains tax
• Impose traditional anti-abuse rules (including wash sale and constructive sale) to digital assets
• Subject charitable donations of digital assets to the same rules as those imposed on publicly traded securities
• Allow mark-to-market accounting for digital asset dealers and traders
• Create tax rules for US dollar stablecoin transactions
• Establish that mining and staking validation rewards will be taxed as ordinary income—note, however, that the bill does not address the timing issues involved in mining and staking (i.e., does not clarify when mining and staking rewards become subject to tax)
• Direct the Treasury Department to establish a temporary program that will allow taxpayers to disclose reporting errors, with reduced penalties
• Clarify (and narrow) certain digital asset broker reporting requirements

DATCA has not yet been scheduled for a vote on the House floor, but could get a House floor vote during the 119^th Congress’s November-December lame duck session.

Prospects: Chances for Congressional action on DACTA are not great in light of the Senate’s mid-September failure to advance the overall crypto regulatory structure bill, the CLARITY Act (HR 3633), which the House passed last year. Also complicating prospects for lame duck action is the daunting agenda of unfinished business on other high-profile issues (including the need to fund the government for fiscal year 2027). Although DACTA has garnered bipartisan support, it has also triggered bipartisan concerns. This may be an issue that has to wait for 2027.