26 U.S.C. 1058added (d)by H.R. 10357 Sec. 201(b)
(d) Specified assets.— For purposes of this section, the term "specified assets" means—(1) securities (as defined in section 1236(c)), and(2) traded digital assets.
The bill says: Section 1058 is amended by adding at the end the following new subsection:
Bill text · Current law (26 U.S.C. 1058)
26 U.S.C. 1058(a)changedby H.R. 10357 Sec. 201(d)
(a) General rule. In the case of a taxpayer who transfers securities (as defined in section 1236(c)) pursuant to an agreement which meets the requirements of subsection (b), no gain or loss shall be recognized on the exchange of such securities by the taxpayer for an obligation under such agreement, or on the exchange of rights under such agreement by that taxpayer for securities identical to the securities transferred by that taxpayer.
The bill says: Section 1058(a) is amended by striking "(as defined in section 1236(c))".
Bill text · Current law (26 U.S.C. 1058)
26 U.S.C. 475renumberedby H.R. 10357 Sec. 202(a)
(g) Election of mark to market for dealers in covered digital assets.—(1) In general.— In the case of a dealer in covered digital assets who elects the application of this subsection, this section shall apply to covered digital assets held by such dealer in the same manner as this section applies to securities held by a dealer in securities.(2) Covered digital asset.— For purposes of this section, the term "covered digital asset" means—(A) any specified traded digital asset,(B) any notional principal contract with respect to any specified traded digital asset,(C) any evidence of an interest in, or a derivative instrument in, any digital asset described in subparagraph (A) or (B), including any option, forward contract, futures contract, short position, and any similar instrument in such a digital asset, and(D) any position which—(i) is not a covered digital asset described in subparagraph (A), (B), or (C),(ii) is a hedge with respect to such a covered digital asset, and(iii) is clearly identified in the taxpayer’s records as being described in this subparagraph before the close of the day on which it was acquired or entered into (or such other time as the Secretary may by regulations prescribe).(3) Specified traded digital asset.— For purposes of paragraph (2)—(A) In general.— The term "specified traded digital asset" means—(i) any widely traded digital asset,(ii) any qualified U.S. dollar stablecoin,(iii) any qualified pool token asset (as defined in section 1051(b)(3)(B)),(iv) any traded digital asset which—(I) would be a widely traded digital asset but for the requirement of clause (ii) of section 7701(p)(3)(A), and(II) has an average daily trading volume, determined on the basis of business days during the calendar year that ends in or with the preceding taxable year, that exceeds $5,000,000, or(v) any traded digital asset which—(I) would be a widely traded digital asset but for the requirement of clause (iii) of section 7701(p)(3)(A), and(II) constitutes the principal asset held by an entity that is not registered under the Investment Company Act of 1940 and the securities of which are listed and traded on a national securities exchange registered under section 6 of the Securities and Exchange Act of 1934.(B) Limited continued treatment.— In the case of any taxpayer for any taxable year, the term "specified traded digital asset" also includes any traded digital asset that would be a widely traded digital asset but for the requirement of clause (ii) of section 7701(p)(3)(A) if, with respect to one or more of the 3 preceding taxable years—(i) such traded digital asset was a specified traded digital asset described in clause (i) or (ii) of subparagraph (A) with respect to such taxable year,(ii) the taxpayer had an election in effect under this subsection that applied to such taxable year and each intervening taxable year, and(iii) the taxpayer held specified traded digital assets of such type (determined under rules similar to the rules of section 1051(b)(2)), or covered digital assets described in subparagraph (B), (C), or (D) of paragraph (2) with respect to such type of specified traded digital asset, to which paragraph (1) applied for such taxable year.(4) Election.— An election under this subsection may be made without the consent of the Secretary. Such an election, once made, shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.
The bill says: Section 475 is amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection:
Bill text · Current law (26 U.S.C. 475)
26 U.S.C. 475(f)changedby H.R. 10357 Sec. 202(b)
(f) Election of mark to market for traders in securities or commodities, commodities, or covered digital assets. (1) Traders in securities. In the case of a person who is engaged in a trade or business as a trader in securities and who elects to have this paragraph apply to such trade or business— (i) such person shall recognize gain or loss on any…
The bill says: in the heading, by striking "or commodities" and inserting ", commodities, or covered digital assets",
Bill text · Current law (26 U.S.C. 475)
26 U.S.C. 475(f)renumberedby H.R. 10357 Sec. 202(b)
The bill says: by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph:
Bill text · Current law (26 U.S.C. 475)
26 U.S.C. 475(f)(4)changedby H.R. 10357 Sec. 202(b)
The bill says: in paragraph (4), as so redesignated, by striking "paragraphs (1) and (2)" and inserting "paragraphs (1), (2), and (3)".
Bill text · Current law (26 U.S.C. 475)
26 U.S.C. 475(d)added (4)by H.R. 10357 Sec. 202(c)
(4) Treatment of covered digital assets which are securities or commodities.— In the case of any covered digital asset which is a security or commodity (determined without regard to this paragraph), such covered digital asset shall not be treated as a security or commodity for purposes of subsections (b) through (g).
The bill says: Section 475(d) is amended by adding at the end the following new paragraph:
Bill text · Current law (26 U.S.C. 475)
26 U.S.C. 199A(d)(2)(B)changedby H.R. 10357 Sec. 202(e)
(B) which involves the performance of services that consist of investing and investment management, trading, or dealing in securities (as defined in section 475(c)(2)), partnership interests, or commodities (as defined in section 475(e)(2))commodities (as defined in section 475(e)(2)), traded digital assets, or covered digital assets (as defined in section 475(g)(2)).
The bill says: Section 199A(d)(2)(B) is amended by striking "or commodities (as defined in section 475(e)(2))" and inserting "commodities (as defined in section 475(e)(2)), traded digital assets, or covered digital assets (as defined in section 475(g)(2))".
Bill text · Current law (26 U.S.C. 199A)
26 U.S.C. 475(e)(2)changedby H.R. 10357 Sec. 202(f)
(2) Commodity. For purposes of this subsection and subsection (f)this section, the term "commodity" means— (A) any commodity which is actively traded (within the meaning of section 1092(d)(1)); (B) any notional principal contract with respect to any commodity described in subparagraph (A); (C) any evidence of an…
The bill says: Section 475(e)(2) is amended by striking "this subsection and subsection (f)" and inserting "this section".
Bill text · Current law (26 U.S.C. 475)
26 U.S.C. 475changedby H.R. 10357 Sec. 202(f)
The bill says: The heading of section 475 is amended by striking "dealers in securities" and inserting "certain dealers and traders".
Bill text · Current law (26 U.S.C. 475)
26 U.S.C. 864(b)(2)changedby H.R. 10357 Sec. 203(a)
(2) Trading in securities or commoditiescommodities, or traded digital assets. Trading in stocks or securities through a resident broker, commission agent, custodian, or other independent agent. Trading in stocks or securities for the taxpayer's own account, whether by the taxpayer or his employees or through a…
The bill says: in the heading, by striking "or commodities" and inserting "commodities, or traded digital assets",
Bill text · Current law (26 U.S.C. 864)
26 U.S.C. 864(b)(2)renumberedby H.R. 10357 Sec. 203(a)
(C) Traded digital assets.—(i) In general.— Trading in traded digital assets through a resident broker, commission agent, custodian, staking service provider, or other independent agent.(ii) Trading for taxpayer’s own account.— Trading in traded digital assets for the taxpayer's own account, whether by the taxpayer or his employees or through a resident broker, commission agent, custodian, staking service provider, or other agent, and whether or not any such employee or agent has discretionary authority to make decisions in effecting the transactions. This clause shall not apply in the case of a dealer in digital assets.(iii) Coordination with rules for securities and commodities.— A traded digital asset shall not be treated as a security or commodity for purposes of this paragraph.
The bill says: by redesignating subparagraph (C) as subparagraph (D) and by inserting the following new subparagraph after subparagraph (B):
Bill text · Current law (26 U.S.C. 864)
26 U.S.C. 864(b)(2)(D)changedby H.R. 10357 Sec. 203(a)
The bill says: by striking "and (B)(i)" and inserting ", (B)(i), and (C)(i)", and
Bill text · Current law (26 U.S.C. 864)
26 U.S.C. 864(b)(2)(D)changedby H.R. 10357 Sec. 203(a)
The bill says: by striking "or in commodities" and inserting "in commodities, or in traded digital assets".
Bill text · Current law (26 U.S.C. 864)
26 U.S.C. 170(f)(11)(A)(ii)(I)changedby H.R. 10357 Sec. 204(a)
The bill says: Section 170(f)(11)(A)(ii)(I) is amended by inserting "qualified U.S. dollar stablecoins, widely traded digital assets (except as the Secretary determines appropriate to prevent abuse of this section)," after "publicly traded securities (as defined in section 6050L(a)(2)(B)),".
Bill text · Current law (26 U.S.C. 170)
26 U.S.C. 170(f)added (20)by H.R. 10357 Sec. 204(b)
(20) Contributions of conversion eligible digital assets.—(A) In general.— No deduction shall be allowed under subsection (a) for any contribution of a conversion eligible digital asset (as defined in section 1046(d)).(B) Cross reference.— For nonrecognition of gain on certain sales and exchanges of conversion eligible digital assets the proceeds of which are used to make charitable contributions, see section 1046.
The bill says: Section 170(f) is amended by adding at the end the following new paragraph:
Bill text · Current law (26 U.S.C. 170)
26 U.S.C. 1091changedby H.R. 10357 Sec. 301(a)
(a) Disallowance of loss deduction. In the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securitiesspecified assets where it appears that, within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securitiesspecified assets, then no deduction shall be allowed under section 165 unless the taxpayer is a dealer in stock or securitiesspecified assets and the loss is sustained in a transaction made in the ordinary course of such business. For purposes of this section, the term "stock or securitiesspecified assets" shall, except as provided in regulations, include contracts or options to acquire or sell stock or securitiesspecified assets. (b) Stock acquired less than stock sold. If the amount of stock or securitiesspecified assets acquired (or covered by the contract or option to acquire) is less than the amount of stock or securitiesspecified assets sold or otherwise disposed of, then the particular shares of stock or securitiesspecified assets the loss from the sale or other disposition of which is not deductible shall be determined under regulations prescribed by the Secretary. (c) Stock acquired not less than stock sold. If the amount of stock or securitiesspecified assets acquired (or covered by the contract or option to acquire) is not less than the amount of stock or securitiesspecified assets sold or otherwise disposed of, then the particular shares of stock or securitiesspecified assets the acquisition of which (or the contract or option to acquire which) resulted in the nondeductibility of the loss shall be determined under regulations prescribed by the Secretary. (d) Unadjusted basis in case of wash sale of stock. If the property consists of stock or securitiesspecified assets the acquisition of which (or the contract or option to acquire which) resulted in the nondeductibility (under this section or corresponding provisions of prior internal revenue laws) of the loss from the sale or other disposition of substantially identical stock or securitiesspecified assets, then the basis shall be the basis of the stock or securitiesspecified assets so sold or disposed of, increased or decreased, as the case may be, by the difference, if any, between the price at which the property was acquired and the price at which such substantially identical stock or securitiesspecified assets were sold or otherwise disposed of. (e) Certain short sales of stock or securitiesspecified assets and securities futures contracts to sell. Rules similar to the rules of subsection (a) shall apply to any loss realized on the closing of a short sale of (or the sale, exchange, or termination of a securities futures contract to sell) stock or securitiesspecified assets if, within a period beginning 30 days before the date of such closing and ending 30 days after such date— (1) substantially identical stock or securitiesspecified assets were sold, or (2) another short sale of (or securities futures contracts to sell) substantially identical stock or securitiesspecified assets was entered into. (f) Cash settlement. This section shall not fail to apply to a contract or option to acquire or sell stock or securitiesspecified assets solely by reason of the fact that the contract or option settles in (or could be settled in) cash or property other than such stock or securitiesspecified assets.
The bill says: by striking "stock or securities" each place it appears and inserting "specified assets", and
Bill text · Current law (26 U.S.C. 1091)
26 U.S.C. 1091changedby H.R. 10357 Sec. 301(a)
(a) Disallowance of loss deduction. In the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities where it appears that, within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securities, then no deduction shall be allowed under section 165 unless the taxpayer is a dealer in stock or securities and the loss is sustained in a transaction made in the ordinary course of such business. For purposes of this section, the term "stock or securities" shall, except as provided in regulations, include contracts or options to acquire or sell stock or securities. (b) Stock acquired less than stock sold. If the amount of stock or securities acquired (or covered by the contract or option to acquire) is less than the amount of stock or securities sold or otherwise disposed of, then the particular shares of stock or securities the loss from the sale or other disposition of which is not deductible shall be determined under regulations prescribed by the Secretary. (c) Stock acquired not less than stock sold. If the amount of stock or securities acquired (or covered by the contract or option to acquire) is not less than the amount of stock or securities sold or otherwise disposed of, then the particular shares of stock or securities the acquisition of which (or the contract or option to acquire which) resulted in the nondeductibility of the loss shall be determined under regulations prescribed by the Secretary. (d) Unadjusted basis in case of wash…
The bill says: by striking "shares of" each place it appears.
Bill text · Current law (26 U.S.C. 1091)
26 U.S.C. 1091added (g)by H.R. 10357 Sec. 301(b)
(g) Specified asset.— For purposes of this section—(1) In general.— The term "specified asset" means—(A) any stock or security, and(B) any traded digital asset other than a qualified U.S. dollar stablecoin.(2) Contracts and options.— Except as otherwise provided in regulations, the term "specified asset" includes any contract or option to acquire or sell any specified asset described in paragraph (1).(3) Treatment of tokenized digital assets as substantially identical to an economically equivalent stock or security.— A tokenized digital asset (and a wrapped digital asset with respect to which the reference digital asset is a traded digital asset) shall be treated as substantially identical to any stock, security, or traded digital asset if such tokenized digital asset (or such wrapped digital asset) is economically equivalent to such stock, security, or traded digital asset.(4) Functional currency other than the dollar.— In the case of any taxpayer or qualified business unit (as defined in section 989(a)), a qualified U.S. dollar stablecoin shall not be treated as a qualified U.S. dollar stablecoin for purposes of paragraph (1)(B) if such taxpayer or qualified business unit uses a functional currency other than the dollar.
The bill says: Section 1091 is amended by adding at the end the following new subsection:
Bill text · Current law (26 U.S.C. 1091)
26 U.S.C. 1091(a)changedby H.R. 10357 Sec. 301(d)
The bill says: Section 1091(a) is amended by striking the last sentence.
Bill text · Current law (26 U.S.C. 1091)
26 U.S.C. 1091changedby H.R. 10357 Sec. 301(d)
(a) Disallowance of loss deduction. In the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securitiesspecified assets where it appears that, within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange on which the entire amount of gain or loss…
The bill says: The heading of section 1091 is amended by striking "stock or securities" and inserting "specified assets".
Bill text · Current law (26 U.S.C. 1091)
26 U.S.C. 312(f)(1)changedby H.R. 10357 Sec. 301(d)
The bill says: Section 312(f)(1) is amended by striking "stock or securities" and inserting "specified assets".
Bill text · Current law (26 U.S.C. 312)
26 U.S.C. 1256(f)(5)changedby H.R. 10357 Sec. 301(d)
(5) Special rule related to losses. Section 1091 (relating to loss from wash sales of stock or securitiesspecified assets) shall not apply to any loss taken into account by reason of paragraph (1) of subsection (a).
The bill says: Section 1256(f)(5) is amended by striking "stock or securities" and inserting "specified assets".
Bill text · Current law (26 U.S.C. 1256)
26 U.S.C. 6045(g)(2)(B)(ii)changedby H.R. 10357 Sec. 301(d)
The bill says: by striking "stock or securities" and inserting "specified assets", and
Bill text · Current law (26 U.S.C. 6045)
26 U.S.C. 6045(g)(2)(B)(ii)changedby H.R. 10357 Sec. 301(d)
The bill says: by striking "identical securities" and inserting "identical specified assets".
Bill text · Current law (26 U.S.C. 6045)
26 U.S.C. 1259(b)(1)changedby H.R. 10357 Sec. 302(a)
(1) In general. Except as provided in paragraph (2), the term "appreciated financial position" means any position with respect to any stock, debt instrument , digital asset (other than a qualified U.S. dollar stablecoin), or partnership interest if there would be gain were such position sold, assigned, or otherwise terminated at its fair market value.
The bill says: Section 1259(b)(1) is amended by inserting ", digital asset (other than a qualified U.S. dollar stablecoin)" after "debt instrument".
Bill text · Current law (26 U.S.C. 1259)
26 U.S.C. 1259(c)(2)changedby H.R. 10357 Sec. 302(b)
(2) Exception for sales of nonpublicly traded property. A taxpayer shall not be treated as having made a constructive sale solely because the taxpayer enters into a contract for sale of any stock, debt instrument, or partnership interest which is not a marketable security (as defined in section 453(f)) or widely traded digital asset if the contract settles within 1 year after the date such contract is entered into.
The bill says: Section 1259(c)(2) is amended by inserting "or widely traded digital asset" after "marketable security (as defined in section 453(f))".
Bill text · Current law (26 U.S.C. 1259)
26 U.S.C. 1259(c)added (5)by H.R. 10357 Sec. 302(c)
(5) Treatment of tokenized digital assets as substantially identical to economically equivalent financial property.— A tokenized digital asset shall be treated as substantially identical to any stock, debt instrument, or partnership interest if such tokenized digital asset is economically equivalent to such stock, debt instrument, or partnership interest.
The bill says: Section 1259(c) is amended by adding at the end the following new paragraph:
Bill text · Current law (26 U.S.C. 1259)
26 U.S.C. 1259(e)added (4)by H.R. 10357 Sec. 302(d)
(4) Qualified U.S. dollar stablecoins and functional currency other than the dollar.— In the case of any taxpayer or qualified business unit (as defined in section 989(a)), a qualified U.S. dollar stablecoin (determined without regard to this paragraph) shall not be treated as a qualified U.S. dollar stablecoin for purposes of this section if such taxpayer or qualified business unit uses a functional currency other than the dollar.
The bill says: Section 1259(e) is amended by adding at the end the following new paragraph:
Bill text · Current law (26 U.S.C. 1259)
26 U.S.C. 954(c)(1)(B)changedby H.R. 10357 Sec. 303(a)
The bill says: by striking "or" at the end of clause (ii),
Bill text · Current law (26 U.S.C. 954)
26 U.S.C. 954(c)(1)(B)renumberedby H.R. 10357 Sec. 303(a)
The bill says: by redesignating clause (iii) as clause (iv), and
Bill text · Current law (26 U.S.C. 954)
26 U.S.C. 954(c)(1)(B)added (iii)by H.R. 10357 Sec. 303(a)
(iii) which is a digital asset, or
The bill says: by inserting after clause (ii) the following new clause:
Bill text · Current law (26 U.S.C. 954)
26 U.S.C. 954(c)(1)added (I)by H.R. 10357 Sec. 303(b)
(I) Certain passive digital asset validation supporting income.— Income derived from staking, mining, or similar activities in support of the validation of digital asset transactions, unless—(i) such income is derived in the active conduct of a trade or business of validating such transactions,(ii) substantially all of the controlled foreign corporation’s digital assets are related to such trade or business, and(iii) substantially all of the activities of such trade or business occur in the same country as the country in which such corporation is created or organized (or in the case of a qualified business unit described in section 989(a), is attributable to activities of the unit in the country in which the unit both maintains its principal office and conducts substantial business activity).(J) Certain payments pursuant to digital asset lending agreements.— In the case of an agreement described in section 1058(a) pursuant to which traded digital assets are transferred, any payment made pursuant to such agreement other than any payment described in section 1058(b)(1).
The bill says: Section 954(c)(1) is amended by adding at the end the following new subparagraphs:
Bill text · Current law (26 U.S.C. 954)
26 U.S.C. 954(c)(2)(C)(i)changedby H.R. 10357 Sec. 303(c)
The bill says: by striking "or (G)" and inserting "(G), or (I)", and
Bill text · Current law (26 U.S.C. 954)
26 U.S.C. 954(c)(2)(C)(i)changedby H.R. 10357 Sec. 303(c)
The bill says: by striking "and" at the end,
Bill text · Current law (26 U.S.C. 954)
26 U.S.C. 954(c)(2)(C)changedby H.R. 10357 Sec. 303(c)
The bill says: by striking the period at the end of clause (ii) and inserting ", and", and
Bill text · Current law (26 U.S.C. 954)
26 U.S.C. 954(c)(2)(C)added (iii)by H.R. 10357 Sec. 303(c)
(iii) if such dealer is a dealer in covered digital assets (within the meaning of section 475), any interest or dividend (or equivalent amount described in subparagraph (E) or (G) of paragraph (1)) or income described in paragraph (1)(I), from any transaction (including any hedging transaction) entered into in the ordinary course of such dealer’s trade or business as such a dealer in covered digital assets, but only if the income from the transaction is attributable to activities of the dealer in the country under the laws of which the dealer is created or organized (or in the case of a qualified business unit described in section 989(a), is attributable to activities of the unit in the country in which the unit both maintains its principal office and conducts substantial business activity).
The bill says: by adding at the end the following new clause:
Bill text · Current law (26 U.S.C. 954)
26 U.S.C. 937(c)added (3)by H.R. 10357 Sec. 304(a)
(3) Special rules for traded digital assets.—(A) In general.— If an individual required to file a specified notice under paragraph (1) is a specified possession resident individual (as defined in subsection (d)(3)) for the taxable year to which such notice relates, such notice shall include the fair market value and basis of each traded digital asset property held by the taxpayer as of the close of the preceding taxable year.(B) De minimis exception.— Subparagraphs (A) and (E) shall not apply if the aggregate fair market value of traded digital asset property which would (but for this subparagraph) be required to be included in a notice under such subparagraph (A) or (E), as the case may be, does not exceed $10,000.(C) Specified notice.— For purposes of this paragraph, the term "specified notice" means a notice required under paragraph (1) by reason of the individual taking the position for United States income tax reporting purposes that the individual became a bona fide resident of a possession specified in subsection (a)(1).(D) Traded digital asset property.— For purposes of this paragraph, the term "traded digital asset property" has the meaning given such term in subsection (d)(5).(E) Transition rule.— In the case of an individual who was required to file a specified notice under paragraph (1) with respect to one of the 9 taxable years immediately preceding the first taxable year of the taxpayer beginning after December 31, 2026, and who was a specified possession resident individual (as defined in subsection (d)(3)) for such taxable year, such individual shall file a notice with the Secretary stating the fair market value and basis (determined as of the last day of the taxable year preceding the taxable year to which such notice relates) of each traded digital asset property (as defined in subsection (d)(5)) that was held by the taxpayer both on such last day and on January 1, 2027. The notice required under the preceding sentence shall be filed with the Secretary not later than the earlier of—(i) the due date of the taxpayer’s return of tax for the taxpayer’s first taxable year beginning after December 31, 2026, during which the taxpayer disposes of any traded digital asset property with respect to which information is required to be included in such notice, and(ii) such date as the Secretary may specify under subsection (d)(6)(B)(i).
The bill says: Section 937(c) is amended by adding at the end the following new paragraph:
Bill text · Current law (26 U.S.C. 937)
26 U.S.C. 937added (d)by H.R. 10357 Sec. 304(b)
(d) Special rules for traded digital assets.—(1) In general.— Notwithstanding subsection (b)(1) (and except as provided in subsection (b)(2)), in the case of any specified possession resident individual for any taxable year, any gain recognized (directly or indirectly) on the disposition of traded digital asset property during such taxable year—(A) shall, except as provided in subparagraph (B), be treated as gain from sources within the United States, and(B) shall be treated as gain from sources within the relevant possession (and not from sources within the United States) to the extent that the taxpayer—(i) timely provided the information specified in subsection (c)(3) to the Secretary with respect to such property, and(ii) demonstrates to the satisfaction of the Secretary that such gain is properly attributable to the increase in the value of such property during periods that such individual was a bona fide resident of such possession.(2) Election for widely traded digital assets.—(A) In general.— In the case of any electing individual—(i) such individual shall recognize gain on any widely traded digital assets held by such individual as of the close of the taxable year preceding the taxable year described in subparagraph (B) as if such assets were sold for their fair market value as of such time,(ii) proper adjustment shall be made in the amount of any gain or loss subsequently realized for gain taken into account under clause (i), and(iii) paragraph (1) shall not apply to any disposition of a widely traded digital asset by such taxpayer (without regard to whether clause (i) applied to such asset).(B) Electing individual.— For purposes of this paragraph, the term "electing individual" means any specified possession resident individual who elects (in such manner as the Secretary may provide) the application of this paragraph not later than the due date for the return of tax for the taxable year for which such individual first becomes a bona fide resident of the relevant possession.(3) Specified possession resident individual.— For purposes of this subsection, the term "specified possession resident individual" means, with respect to any taxable year, any citizen of the United States who—(A) is a bona fide resident of Guam, American Samoa, the Northern Mariana Islands, Puerto Rico, or the Virgin Islands for such taxable year, and(B) was a resident of the United States at any time during the preceding 10 taxable years.(4) Relevant possession.— For purposes of this subsection, the term "relevant possession" means, with respect to any specified possession resident individual for any taxable year, the possession referred to in paragraph (3)(A) with respect to which such individual is a bona fide resident for such taxable year.(5) Traded digital asset property.— For purposes of this subsection, the term "traded digital asset property" means—(A) any traded digital asset,(B) any notional principal contract with respect to a traded digital asset,(C) any evidence of an interest in, or a derivative instrument in, any traded digital asset described in subparagraph (A) or (B), including any option, forward contract, futures contract, short position, and any similar instrument in such traded digital asset,(D) to the extent provided by the Secretary, any position which—(i) is not a traded digital asset property described in subparagraph (A), (B), or (C), and(ii) is a hedge with respect to such a traded digital asset property, or(E) any interest in any entity if—(i) the taxpayer contributed any traded digital asset to such entity (directly or indirectly), or(ii) more than 25 percent of the value of such entity is derived (directly or indirectly) from traded digital assets (other than qualified U.S. dollar stablecoins), determined without regard to any assets acquired by such entity as part of a plan a principal purpose of which is to prevent interests in such entity from being treated as traded digital assets for purposes of this section.(6) Regulations.— The Secretary shall issue regulations or other guidance as may be necessary or appropriate to carry out the purposes of this subsection, including regulations or other guidance—(A) treating gain on dispositions of traded digital asset property by a partnership as described in section 702(a)(7) to the extent such gain is taken into account (directly or indirectly) in the distributive share of any specified possession resident individual,(B) providing for the appropriate allocation of losses on the disposition of traded digital asset property with respect to specified possession resident individuals, and(C) providing appropriate transition rules for individuals who first became a bona fide resident of the relevant possession during one of the 9 taxable years preceding the first taxable year of the taxpayer beginning after December 31, 2026, including alternative rules—(i) for timely providing the information described in subsection (c)(3),(ii) for timely making the election described in paragraph (2)(B), and(iii) for applying paragraph (2)(A)—(I) with respect to the taxable year for which the election is timely made under clause (ii) of this subparagraph, and(II) only to widely traded digital assets acquired before becoming a bona fide resident of the relevant possession and not disposed of before January 1, 2027.
The bill says: Section 937 is amended by adding at the end the following new subsection:
Bill text · Current law (26 U.S.C. 937)
26 U.S.C. 6501(c)(8)(A)changedby H.R. 10357 Sec. 304(c)
The bill says: Section 6501(c)(8)(A) is amended by inserting "937(c)(3)," before "1298(f),".
Bill text · Current law (26 U.S.C. 6501)
26 U.S.C. 163(f)(2)(A)changedby H.R. 10357 Sec. 305(a)
The bill says: by striking "or" at the end of clause (ii),
Bill text · Current law (26 U.S.C. 163)
26 U.S.C. 163(f)(2)(A)changedby H.R. 10357 Sec. 305(a)
The bill says: by striking the period at the end of clause (iii) and inserting ", or", and
Bill text · Current law (26 U.S.C. 163)
26 U.S.C. 163(f)(2)(A)added (iv)by H.R. 10357 Sec. 305(a)
(iv) is a qualified U.S. dollar stablecoin.
The bill says: by adding at the end the following new clause:
Bill text · Current law (26 U.S.C. 163)
26 U.S.C. 4701added (c)by H.R. 10357 Sec. 305(b)
(c) Digital assets.—(1) Location of disclosure statement.— In the case of any digital asset, the requirement of clause (iii) of subsection (b)(1)(B) shall be treated as satisfied if the statement described therein is included in all written terms or marketing materials with respect to such digital asset and in such other locations or documents as the Secretary may prescribe in regulations.(2) Treatment of digital assets without a fixed maturity date.— In the case of any digital asset that does not have a fixed maturity date at issue, the date of maturity of such asset for purposes of subsection (a)(2) shall be treated as the date that is 25 years after the date of issuance of such digital asset.
The bill says: Section 4701 is amended by adding at the end the following new subsection:
Bill text · Current law (26 U.S.C. 4701)
26 U.S.C. 165a new sectionrenumberedby H.R. 10357 Sec. 306(a)
The bill says: Section 165 is amended by redesignating subsection (m) as subsection (n) and by inserting after subsection (l) the following new subsection:
Bill text
26 U.S.C. 165(g)(2)a new sectionchangedby H.R. 10357 Sec. 306(a)
The bill says: by striking the semicolon at the end of subparagraph (A) and inserting a comma,
Bill text
26 U.S.C. 165(g)(2)a new sectionchangedby H.R. 10357 Sec. 306(a)
The bill says: by striking "; or" at the end of subparagraph (B) and inserting a comma,
Bill text
26 U.S.C. 165(g)(2)a new sectionchangedby H.R. 10357 Sec. 306(a)
The bill says: by striking the period at the end of subparagraph (C) and inserting ", or", and
Bill text
26 U.S.C. 165(g)(2)a new sectionadded (D)by H.R. 10357 Sec. 306(a)
(D) a tokenized digital asset that is economically equivalent to a security described in subparagraph (A), (B), or (C).
The bill says: by adding at the end the following new subparagraph:
Bill text
26 U.S.C. 1234B(c)changedby H.R. 10357 Sec. 306(b)
(c) Specified asset futures contract.— For purposes of this section—(1) In general.— The term "specified asset futures contract" means—(A) any securities futures contract, and(B) any futures contract in a digital asset.(2) Securities futures contract.— The term "securities futures contract" means
The bill says: Section 1234B(c) is amended by striking all that precedes "any security future (as defined" and inserting the following:
Bill text · Current law (26 U.S.C. 1234B)
26 U.S.C. 1234A(1)changedby H.R. 10357 Sec. 306(b)
The bill says: Section 1234A(1) is amended by striking "securities futures contract" and inserting "specified asset futures contract".
Bill text · Current law (26 U.S.C. 1234A)
26 U.S.C. 1234B(e)changedby H.R. 10357 Sec. 306(b)
The bill says: Section 1234B(e) is amended by striking "securities futures contracts" and inserting "specified asset futures contracts".
Bill text · Current law (26 U.S.C. 1234B)
26 U.S.C. 1234Bchangedby H.R. 10357 Sec. 306(b)
The bill says: The heading of section 1234B is amended by striking "securities futures contracts" and inserting "specified asset futures contracts".
Bill text · Current law (26 U.S.C. 1234B)
26 U.S.C. 731(c)(2)(A)changedby H.R. 10357 Sec. 307(a)
means—(i) financial instruments
The bill says: by striking "means financial instruments" and inserting
Bill text · Current law (26 U.S.C. 731)
26 U.S.C. 731(c)(2)(A)changedby H.R. 10357 Sec. 307(a)
The bill says: by striking the period at the end and inserting ", and", and
Bill text · Current law (26 U.S.C. 731)
26 U.S.C. 731(c)(2)(A)added (ii)by H.R. 10357 Sec. 307(a)
(ii) traded digital assets (determined without regard to clause (iii) of section 7701(p)(2)(A)) other than specified stablecoins (as defined in subsection (d)(4)(A)).
The bill says: by adding at the end the following new clause:
Bill text · Current law (26 U.S.C. 731)
26 U.S.C. 731renumberedby H.R. 10357 Sec. 307(a)
The bill says: by redesignating subsection (d) as subsection (e), and
Bill text · Current law (26 U.S.C. 731)
26 U.S.C. 731added (d)by H.R. 10357 Sec. 307(a)
(d) Treatment of specified stablecoins.—(1) In general.— For purposes of subsection (a)(1) and section 737—(A) the term "money" includes specified stablecoins, and(B) such specified stablecoins shall be taken into account at their fair market value as of the date of the distribution.(2) Basis of securities distributed.— Except as otherwise provided by the Secretary—(A) In general.— For purposes of subsection (c)(4), the term "marketable securities" includes specified stablecoins (other than exempt U.S. dollar stablecoins).(B) Exempt U.S. dollar stablecoins.— In the case of any exempt U.S. dollar stablecoin, paragraph (1) shall be applied by substituting "sections 732, 733, and 737" for "section 737".(3) Application of certain other rules.— Except as otherwise provided by the Secretary, for purposes of paragraphs (5) and (6) of subsection (c), the term "marketable securities" includes specified stablecoins.(4) Definitions.— For purposes of this subsection—(A) Specified stablecoin.— The term "specified stablecoin" means any digital asset which is designed to track the value of the functional currency of the partner to which such digital asset is distributed.(B) Exempt U.S. dollar stablecoin.— The term "exempt U.S. dollar stablecoin" means any specified stablecoin if—(i) the functional currency referred to in subparagraph (A) with respect to such stablecoin is the dollar, and(ii) no gain or loss would have been recognized by reason of section 1063 if the partnership had sold such stablecoin for its redemption value (as defined in section 1063(d)) immediately before distribution.(5) Regulations.— The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this subsection, including regulations or other guidance to prevent the avoidance of such purposes.
The bill says: by inserting after subsection (c) the following new subsection:
Bill text · Current law (26 U.S.C. 731)
26 U.S.C. 737(e)changedby H.R. 10357 Sec. 307(a)
The bill says: by inserting "and specified stablecoins" after "marketable securities",
Bill text · Current law (26 U.S.C. 737)
26 U.S.C. 737(e)changedby H.R. 10357 Sec. 307(a)
The bill says: by striking "section 731(c)" and inserting "section 731", and
Bill text · Current law (26 U.S.C. 737)
26 U.S.C. 737(e)changedby H.R. 10357 Sec. 307(a)
The bill says: by inserting "and specified stablecoins" after "marketable securities" in the heading thereof.
Bill text · Current law (26 U.S.C. 737)
26 U.S.C. 351(e)(1)(B)renumberedby H.R. 10357 Sec. 307(b)
The bill says: by redesignating clauses (iv) through (viii) as clauses (v) through (ix), respectively, and
Bill text · Current law (26 U.S.C. 351)
26 U.S.C. 351(e)(1)(B)added (iv)by H.R. 10357 Sec. 307(b)
(iv) any traded digital asset (determined without regard to clause (iii) of section 7701(p)(2)(A)),
The bill says: by inserting after clause (iii) the following new clause:
Bill text · Current law (26 U.S.C. 351)
26 U.S.C. 351(e)(1)(B)changedby H.R. 10357 Sec. 307(b)
The bill says: Section 351(e)(1)(B) is amended in the matter following clause (ix) (as redesignated by paragraph (1)) by striking "clauses (i) through (v)" and inserting "clauses (i) through (vi)".
Bill text · Current law (26 U.S.C. 351)
26 U.S.C. 197(e)added (8)by H.R. 10357 Sec. 307(d)
(8) Digital assets.— Except as otherwise provided by the Secretary to prevent abuse, any digital asset.
The bill says: Section 197(e) is amended by adding at the end the following new paragraph:
Bill text · Current law (26 U.S.C. 197)
26 U.S.C. 1092(d)(1)changedby H.R. 10357 Sec. 307(e)
means—(A) any
The bill says: by striking "means any" and inserting
Bill text · Current law (26 U.S.C. 1092)
26 U.S.C. 1092(d)(1)changedby H.R. 10357 Sec. 307(e)
The bill says: by striking the period at the end and inserting ", and", and
Bill text · Current law (26 U.S.C. 1092)
26 U.S.C. 1092(d)(1)added (B)by H.R. 10357 Sec. 307(e)
(B) any traded digital asset (determined without regard to clause (iii) of section 7701(p)(2)(A)).
The bill says: by adding at the end the following new subparagraph:
Bill text · Current law (26 U.S.C. 1092)
26 U.S.C. 3406(h)added (11)by H.R. 10357 Sec. 307(f)
(11) Certain illiquid digital assets paid for digital asset validation supporting activities.—(A) In general.— In the case of an other reportable payment that consists of specified illiquid digital assets, except to the extent provided by the Secretary in regulations or other guidance, the payor shall be treated as having deducted and withheld from such payment the amount specified in subsection (a)(1) (and the proceeds of the liquidation referred to in clause (ii) shall be treated as the amount deducted and withheld under subsection (a)(1)) if such payor—(i) holds the applicable percentage of such specified illiquid digital assets (hereafter referred to as the "withheld amount of digital assets") in a manner that prevents the recipient from using or withdrawing the withheld amount of digital assets,(ii) liquidates the withheld amount of digital assets at fair market value not later than the close of the first business day following the close of such fixed period, and(iii) deposits the proceeds of such liquidation at the time and in the same manner as would be required with respect to an amount withheld on the date of such liquidation.(B) Specified illiquid digital asset.— For purposes of this paragraph, the term "specified illiquid digital assets" means digital assets that are—(i) transferred to the recipient in exchange for digital asset validation supporting activities, and(ii) restricted from being sold, exchanged, transferred, or otherwise disposed of, for a fixed period that ends after the date of such transfer.(C) Applicable percentage.— For purposes of this paragraph, the term "applicable percentage" means the rate of tax referred to in subsection (a)(1), expressed as a percentage.
The bill says: Section 3406(h) is amended by adding at the end the following new paragraph:
Bill text · Current law (26 U.S.C. 3406)
26 U.S.C. 863added (f)by H.R. 10357 Sec. 401(a)
(f) Treatment of income from digital asset validation supporting activities.—(1) In general.— Income from digital asset validation supporting activities shall be sourced—(A) in the United States if the taxpayer is a United States resident, and(B) outside the United States if the taxpayer is a nonresident.(2) Treatment of branches.—(A) Foreign branches.— In the case of a United States person with a qualified business unit (as defined in section 989(a)) in a foreign country, income described in paragraph (1) that constitutes business profits attributable to such unit shall be sourced outside the United States.(B) U.S. branches.— In the case of a person that is not a United States person and that maintains an office or other fixed place of business in the United States, income described in paragraph (1) attributable to such office or other fixed place of business shall be sourced in the United States.(C) Attribution.— For purposes of subparagraphs (A) and (B), the Secretary may issue such regulations or other guidance as the Secretary determines necessary or appropriate for purposes of determining the amount of business profits attributable to a qualified business unit or office or other fixed place of business.(3) Treatment of partnerships.— In the case of a partnership, except as otherwise provided by the Secretary in regulations or other guidance, this subsection shall be applied at the partner level.(4) United States resident; nonresident.— For purposes of this subsection, the terms "United States resident" and "nonresident" have the meaning given such terms, respectively, in section 865(g)(1), determined after application of section 865(g)(2).
The bill says: Section 863 is amended by adding at the end the following new subsection:
Bill text · Current law (26 U.S.C. 863)
26 U.S.C. 6045(g)(3)(D)rewrittenby H.R. 10357 Sec. 501(a)
The bill says: Section 6045(g)(3)(D) is amended to read as follows:
Bill text · Current law (26 U.S.C. 6045)
26 U.S.C. 6045(c)(1)(D)changedby H.R. 10357 Sec. 501(a)
(D) any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assetsspecified digital assets on behalf of another person.
The bill says: Section 6045(c)(1)(D) is amended by striking "digital assets" and inserting "specified digital assets".
Bill text · Current law (26 U.S.C. 6045)
26 U.S.C. 6050I(d)(3)changedby H.R. 10357 Sec. 501(a)
The bill says: Section 6050I(d)(3) is amended by striking "(as defined in section 6045(g)(3)(D))".
Bill text · Current law (26 U.S.C. 6050I)
26 U.S.C. 6045(g)added (7)by H.R. 10357 Sec. 501(b)
(7) Special rules for digital assets used to pay de minimis digital asset fees.—(A) In general.— Except as otherwise provided by the Secretary, in the case of the disposition of a digital asset with respect to which no gain or loss is recognized by reason of section 1044(a)—(i) except as provided in clause (ii), subsection (a) shall not apply to such disposition, and(ii) the broker shall include in a return under subsection (a) such aggregate information relating to such dispositions of the taxpayer as the Secretary determines necessary or appropriate, including for purposes of verifying the taxpayer’s basis in digital assets held by the taxpayer.(B) Application of de minimis exception.— If the broker has been notified by the taxpayer or the Secretary that the exception described in section 1044(f)(1)(B) applies to such taxpayer, the broker may treat such exception as continuing to apply with respect to such taxpayer for any calendar year (hereafter in this subparagraph referred to as the "current calendar year") unless—(i) such taxpayer had more than 5,000 digital asset transactions with such broker during any of the 5 preceding calendar years and the taxpayer has not notified the broker that such exception applies to such taxpayer for the current calendar year,(ii) such taxpayer or the Secretary notifies such broker that such exception does not apply to such taxpayer, or(iii) such broker otherwise knows, or has reason to know, that such exception does not apply to such taxpayer.
The bill says: Section 6045(g) is amended by adding at the end the following new paragraph:
Bill text · Current law (26 U.S.C. 6045)