Crypto Tax in 2026: The Bill the House Just Advanced

On the morning of September 16, 2026, the House Ways and Means Committee advanced the most sweeping rewrite of US digital-asset tax rules it has ever taken up. The Digital Asset Tax Certainty Act (H.R. 10357) cleared on a 38-5 vote, pushing a comprehensive overhaul of how the United States taxes digital assets toward the full House. Bitcoin was trading near an eight-month high around $86,000 that week, per CoinGecko, and the symbolism was hard to miss: the committee that spent the better part of a decade treating crypto as a compliance headache had just endorsed a bill premised on the idea that the tax code, as one sponsor put it, has failed to keep pace with the technology.

For the tens of millions of Americans who hold some form of digital asset, the bill matters less for what it does today (nothing yet; it still needs a full House vote, Senate passage, and a presidential signature) than for what it signals about where the rules are heading. It also makes this a useful moment to lay out how US crypto tax actually works in 2026, because almost everything the bill touches is a pain point that owners feel every filing season. What follows is a section-by-section guide to the current rules, with a clear flag on each one for what H.R. 10357 would change, what it would leave alone, and what got stripped out on the way to that 38-5 vote.

Two things to keep straight before we start. Tax on digital assets is administered by the IRS and the Treasury, not the SEC, so the governing authority here is a stack of IRS notices and revenue rulings rather than securities law. And none of this is tax advice: the figures below are current for the 2026 tax year, but crypto policy moves quickly, and a bill that clears one committee can look very different by the time it reaches a president’s desk.

What the House Actually Did on September 16

The Digital Asset Tax Certainty Act runs 114 pages and was introduced on September 14 by Ways and Means Chairman Jason Smith (R-Mo.), with a roster of co-sponsors that included Representatives Max Miller (R-Ohio) and Steven Horsford (D-Nev.). Miller and Horsford are the authors of the Digital Asset PARITY Act, the bipartisan framework they floated earlier in the year; H.R. 10357 is essentially that framework, reworked into a committee vehicle. The panel took it up in a markup on the morning of September 16 and reported it favorably by 38 votes to 5, with the five no votes coming from Democrats.

Miller framed the bill as an overdue correction. “America’s tax code has failed to keep pace with modern financial technology,” he said in a statement on the legislation. “This bipartisan legislation brings clarity, parity, fairness, and common sense to the taxation of digital assets.” According to a CoinDesk summary of the text, the bill reaches de minimis transactions, gain and loss accounting, transfers, wash sale rules, mining, staking, broker requirements, tokenized assets, and a new voluntary disclosure program, and it directs the Treasury Secretary and the IRS to write implementing rules where the statute leaves gaps.

Passing a committee is not the same as becoming law. There is no full House vote scheduled yet, and the likeliest path, according to 24/7 Wall St, is that the measure gets folded into a larger year-end tax package rather than moving on its own. It is also different from the market-structure fights that dominated headlines: H.R. 10357 is a tax bill about how gains and income get measured and reported, not a licensing or securities-classification bill. With that distinction in mind, here is the ground it is built on.

The Property Rule That Started It All

Every quirk of US crypto tax traces back to a single decision the IRS made in 2014. In Notice 2014-21, the agency ruled that convertible virtual currency is property, not currency, for federal tax purposes. That one classification drives almost everything that follows. Because Bitcoin is property in the eyes of the IRS, disposing of it is treated like selling a share of stock or a rental house: you calculate a capital gain or loss equal to the proceeds minus your cost basis (what you paid, plus fees), and how long you held it decides the rate.

The awkward part is that property rules were not written for money that people actually spend. When you buy a sandwich with dollars, no one computes a gain on the dollars. When you buy the same sandwich with Bitcoin, you have technically disposed of property and realized a taxable gain or loss on the difference between what you paid for that Bitcoin and its value at lunch. Foreign currency gets a de minimis carve-out for exactly this reason; crypto does not. Nearly every reform in H.R. 10357, from the fee exemption to the stablecoin safe harbor, is an attempt to soften the consequences of the property rule without repealing it. The property classification itself stays.

The Taxable-Event Map

The most common filing mistake is not knowing which actions the IRS counts as a taxable event. Buying crypto with dollars and simply holding it is not taxable; it only sets your cost basis. Moving coins between two wallets you both control is not a disposal. But swapping one token for another is a sale of the first token, even if no dollars change hands, and spending crypto is a disposal too. Income that arrives as new tokens (staking, mining, most airdrops, or getting paid for work) is taxed as ordinary income at its fair market value on the day you receive it, and then starts a fresh capital-gains clock. The table below sorts the everyday actions.

One more line item lives at the top of Form 1040: the digital-asset question, which asks whether at any time during the year you received, sold, exchanged, or otherwise disposed of a digital asset. It is a yes-or-no box, it sits under penalty of perjury, and answering it dishonestly is its own problem regardless of what you owe. Buying and holding is generally a “no”; almost anything on the “yes” side of the table above is a “yes.”

The 2026 Rate Card: Short-Term, Long-Term, and the 3.8% Surtax

Once you have a taxable disposal, the rate depends on the holding period. Hold an asset for one year or less and the gain is short-term, taxed at your ordinary income rate (10% to 37% in 2026). Hold it longer than a year and it becomes a long-term gain, taxed at the friendlier 0%, 15%, or 20% brackets. For a token that has appreciated, that one-year line is the single biggest lever an ordinary holder controls; crossing it can cut the rate on the gain by 10 to 20 points. The 2026 thresholds, indexed for inflation under Revenue Procedure 2025-32, are below.

Two surcharges sit on top. Higher earners owe the 3.8% net investment income tax once modified adjusted gross income passes $200,000 (single) or $250,000 (married filing jointly), which effectively lifts the top long-term rate to 23.8%. And NFTs that qualify as collectibles carry a separate long-term maximum of 28% under IRS Notice 2023-27, though that is a ceiling for the highest brackets rather than a flat rate everyone pays. The Kiplinger breakdown of the 2026 thresholds is a handy reference if you are trying to work out which bracket a sale lands in.

Income at Receipt: Staking, Mining, and the Jarrett Test

Rewards are where crypto tax gets genuinely punishing. Under Revenue Ruling 2023-14, staking rewards are ordinary income at their fair market value the moment you gain “dominion and control” over them, meaning the moment you can sell or move them. Mining rewards work the same way under Notice 2014-21. That receipt is event one. When you later sell those tokens, you have a second, capital event, with a basis equal to the value you already reported as income. Two taxable moments from one stack of coins.

The trap is timing. A validator who earns rewards when a token trades at $40 owes ordinary income tax on $40, even if the token is worth $8 by the time taxes are due and the rewards were never sold. That phantom-income problem is one reason staking yields look less generous after tax than the headline APR suggests; the higher on-chain yields that arrived after the Fed’s rate moves, which HOGE Wire covered in our look at real yield after the hike, are ordinary income at receipt, not tax-favored long-term gains.

Whether receipt is even the right moment to tax is now headed for trial. In Jarrett v. United States, a Tennessee couple argues that staking rewards are newly created property, closer to a farmer’s crop or an author’s manuscript, and that new property is not income until it is sold. A bench trial in the Middle District of Tennessee is set for September 29, 2026, and a ruling for the Jarretts would upend the receipt rule for millions of stakers. For now, receipt is the law, and H.R. 10357, as we will see, did not go as far on this point as its own authors first proposed.

The $10 De Minimis: Smaller Than the Headlines Suggest

Today there is no de minimis exemption for crypto at all. A $4 disposal is as reportable as a $40,000 one, which is why a coffee bought with Bitcoin is, on paper, a taxable sale. Several headlines after the markup suggested H.R. 10357 finally fixes that. Read the text and the relief is narrower than it sounds. As 24/7 Wall St spelled out, the bill exempts network or transaction fees of $10 or less, not the purchase itself. Buy the coffee with Bitcoin and you still owe capital gains on the coffee’s value; only the blockchain fee attached to the transfer could escape reporting. Anyone who made more than 5,000 transfers in the prior year is excluded, and the carve-out does not extend to service providers processing transactions for others.

For most everyday users, a fee-only exemption is close to symbolic. Network fees on Ethereum layer-2 networks already run to fractions of a cent, a compression HOGE Wire tracked as Glamsterdam moved toward testnet, so exempting a sub-dollar fee changes little. The 5,000-transfer ceiling also cuts against the most active users: anyone running a smart-account wallet or an automated strategy, the kind detailed in our smart-account field guide, can blow past 5,000 transfers in a busy month and lose the benefit entirely.

Compare that with the two other de minimis proposals in circulation. Senator Cynthia Lummis’s standalone Senate bill would exempt the gain on transactions of $300 or less, with a $5,000 annual cap and inflation adjustment, so the coffee purchase itself, not just its fee, would go unreported. The Bitcoin Policy Institute pushes a broader, value-based threshold and argues that narrow, stablecoin-tilted relief provides “relief where it is least needed while ignoring the users for whom the current rules are most punitive.” Its framing of the underlying absurdity is blunt: every time an American buys a cup of coffee with Bitcoin, they owe the IRS a report.

Closing the Wash-Sale Loophole

Here is one place the property rule works in a holder’s favor. The wash-sale rule in Section 1091 of the tax code stops investors from selling a security at a loss and rebuying it within 30 days just to book the deduction. But Section 1091 applies to “stock or securities,” and crypto is property, so the rule does not touch it. An investor can sell Bitcoin at a loss on Monday, claim the loss, and rebuy the same Bitcoin on Tuesday without waiting out any window. That makes tax-loss harvesting unusually powerful in crypto, and in a year like 2026, when Bitcoin spent months well below its 2025 record before recovering, plenty of holders have real losses to harvest.

H.R. 10357 would close that gap. It extends the wash-sale rule, and a companion constructive-sale rule, to widely traded digital assets, so the 30-day clock would finally apply. The “widely traded” qualifier matters: the extension is aimed at liquid, actively traded tokens like Bitcoin and Ether, and thinly traded assets may sit outside it, at least as the committee text reads. The practical takeaway for anyone sitting on unrealized losses is simple. The window to harvest a loss and immediately rebuy is a feature of current law, not a permanent one, and this bill is the clearest sign yet that it is on borrowed time.

The Staking Deferral That Got Cut

The most consequential edit between the framework and the bill that advanced concerns staking. The original Miller-Horsford design, reported by The Block, let taxpayers elect to defer tax on mining and staking rewards for up to five years, after which the rewards would be taxed as ordinary income at fair market value. It was a middle path between the IRS’s tax-at-receipt position and full deferral until sale, and it directly addressed the phantom-income trap.

That deferral was pared back in the version that cleared committee. Per 24/7 Wall St, the proposal to defer tax on rewards until sale was dropped from the advanced bill, which still sets clearer rules for staking and mining but keeps income-at-receipt as the baseline. Horsford, who co-authored the framework, cast the overall effort in cautious terms in the sponsors’ announcement: “Like any emerging technology, cryptocurrencies need guardrails that allow innovation to grow while protecting taxpayers.” Guardrails, in this case, stopped short of solving the timing problem. That leaves the Jarrett trial, and Lummis’s Senate bill (which still proposes deferring miner and staker income until the tokens are sold), as the live vehicles for anyone hoping to escape tax on rewards they have not cashed out.

Stablecoins and the Everyday-Payment Safe Harbor

If the fee de minimis is the bill’s weakest consumer provision, the stablecoin carve-out is its most targeted. Under the property rule, paying with a dollar-pegged stablecoin is technically a disposal: buy USDC at $0.9999 and spend it at $1.0000 and you have a fraction of a cent in gain to report, times every transaction. The bill treats regulated payment stablecoins differently, exempting everyday payment transactions in them from capital-gains reporting. As first outlined in the Miller-Horsford framework and reported by The Block, the safe harbor covers transactions under $200 in stablecoins issued under the GENIUS Act, provided the token is pegged solely to the US dollar and has stayed within 1% of $1.00 on at least 95% of trading days over the prior year. Brokers and dealers are excluded.

The logic is sound: a token engineered to sit at $1 produces almost no gain to tax, so the reporting burden is pure friction. That is also the basis of the critique. The Bitcoin Policy Institute argues that exempting stablecoins, which barely move, delivers relief where it is least needed while leaving Bitcoin users, whose everyday spending actually generates the taxable gains, out in the cold. The safe harbor leans on the regulated-stablecoin category the GENIUS Act created in 2025, which is why it is drawn so tightly around GENIUS-compliant tokens rather than crypto broadly.

Form 1099-DA and the Wallet-by-Wallet Rule

Reporting, not rates, is where most filers actually get tripped up, and 2026 is the first year the machinery is fully switched on. Form 1099-DA is the IRS’s first dedicated broker-reporting form for digital assets. As Thomson Reuters documented, custodial brokers, which means centralized exchanges, had to report gross proceeds for 2025 transactions, with customer statements going out in early 2026; cost-basis reporting phases in for 2026 transactions, with those forms arriving in early 2027.

The distinction that will generate the most confusion is covered versus non-covered assets. Crypto you bought on an exchange from January 1, 2026 onward is covered: the exchange tracks and reports your basis. Anything you bought earlier, or transferred in from self-custody or another platform, is non-covered: the exchange reports the sale proceeds but shows your basis as unknown, and you have to supply it yourself. Filers who ignore that gap can end up taxed on the full sale price as if their basis were zero. The safest habit is to reconcile every 1099-DA against your own records so the proceeds on your Form 8949 are at least as high as the proceeds the broker reported to the IRS.

Basis itself now has to be tracked account by account. Revenue Procedure 2024-28 ended the old universal method that let you pool cost basis across every wallet; since January 1, 2025, each wallet or exchange account is its own ledger, and you pick a consistent method (FIFO, specific identification, HIFO) for each. You can no longer reach across platforms to pull a high-cost lot from one exchange to blunt a gain on another. H.R. 10357 nods at this pain too, promising simplified accounting rules for widely traded assets and a cleaner set of broker requirements, though the details would fall to Treasury.

The DeFi Blind Spot

The 1099-DA reaches custodial brokers. It does not reach DeFi. That is not an accident. A December 2024 Treasury rule tried to extend broker reporting to DeFi front-ends, and Congress killed it: H.J. Res. 25, signed into law on April 10, 2025, was the first standalone crypto bill ever enacted, overturning what the House Ways and Means Committee itself called the burdensome DeFi broker rule. Centralized exchanges got no such reprieve, because they take custody and control keys, the exact intermediary relationship the broker definition targets.

The result is a large self-reported zone. Swaps on a decentralized exchange, liquidity provision, lending, and yield farming generate no 1099-DA, which does not make them tax-free; it makes them your responsibility to track and report. Much of this ground has no specific IRS guidance, so taxpayers pick a defensible position and apply it consistently. Depositing tokens into a liquidity pool in exchange for LP tokens, for instance, can be treated conservatively as a taxable exchange of property or, more aggressively, as a non-taxable step, and the agency has not said which is right. Rewards you can freely claim are ordinary income at receipt; disposing of LP tokens later is a capital event.

Automation makes the recordkeeping harder, not easier. The rise of agent-driven strategies, the kind explored in our piece on AI agents running DeFi, means a single wallet can fire off thousands of on-chain actions a year with no broker generating a statement for any of them, and, as noted above, enough transfers to disqualify that wallet from the bill’s de minimis relief. Both the Lummis bill and H.R. 10357 try to bring one slice of this into focus by extending securities-lending rules to digital assets, so that lending out crypto is not automatically treated as a taxable disposal, but the broader DeFi frontier stays self-reported.

Today vs. Tomorrow: A Side-by-Side

The bill leaves the foundations (property treatment, capital-gains math, income at receipt) intact and rewrites the edges. The table below sets the current rules against the version of H.R. 10357 that cleared committee. Every entry in the right-hand column is contingent: none of it is law, and the text can shift before any floor vote.

Enforcement, Amnesty, and the Pre-Filing Checklist

The reason all of this is worth getting right is that the IRS can increasingly see it. The 1099-DA gives the agency a direct data feed from exchanges, the digital-asset question on the 1040 creates a perjury hook, and John Doe summonses have already pulled customer records from Coinbase, Kraken, and others. The broader compliance architecture is tightening worldwide, from the reporting nets we examined in the context of Section 311 and FATF enforcement to the automatic-exchange regimes now coming online. The days when on-chain activity felt invisible to tax authorities are over.

H.R. 10357 pairs its stick with an unusual carrot. The bill includes a Digital Asset Voluntary Disclosure Program that, within 12 months of enactment, would let eligible taxpayers amend prior returns and settle outstanding tax, interest, and penalties on their digital-asset activity. For anyone who has been sloppy about past years, that is a rare structured off-ramp, though, like the rest of the bill, it only exists if the thing becomes law.

None of the legislative uncertainty changes what a careful 2026 filer should do now:

• Keep records wallet by wallet, with a consistent accounting method per account, as Revenue Procedure 2024-28 requires.
• Reconcile every 1099-DA against your own numbers, and supply your own basis for any non-covered or transferred-in assets.
• Separate income at receipt (staking, mining, airdrops) from capital gains and losses; they land on different parts of the return.
• If you are sitting on losses, harvesting them and rebuying is still allowed while the wash-sale rule does not apply to crypto, but treat that window as closing.
• Answer the Form 1040 digital-asset question honestly, and do not assume DeFi or self-custody activity is off the IRS’s radar.

Frequently Asked Questions

Do I owe crypto tax in 2026 if I only bought and never sold?

No. Buying crypto with US dollars and holding it is not a taxable event; it only sets your cost basis. You still answer the digital-asset question on Form 1040, but tax is triggered only when you dispose of the asset or receive crypto as income such as staking or mining rewards.

Does the new House bill make small crypto purchases tax-free?

No, on two counts. H.R. 10357 is not law; it has only cleared committee. And even as written, its de minimis exemption covers network or transaction fees of $10 or less, not the purchase itself, so spending Bitcoin on a coffee would still be a taxable disposal of the Bitcoin.

Is the wash-sale rule in effect for crypto in 2026?

No. The wash-sale rule in Section 1091 applies only to stock and securities, and crypto is treated as property, so you can currently sell crypto at a loss and immediately rebuy it while still claiming the loss. H.R. 10357 would extend the wash-sale rule to widely traded digital assets, but that change is not yet law.

How are staking rewards taxed in 2026?

Staking rewards are ordinary income at their fair market value when you gain dominion and control over them, under Revenue Ruling 2023-14, and mining rewards work the same way. Selling those tokens later is a separate capital gain or loss. The Jarrett v. United States case challenges taxing rewards at receipt, with a trial set for September 29, 2026.

Will my exchange send a 1099-DA, and does it include my cost basis?

Custodial exchanges issue Form 1099-DA. For 2025 transactions the form reports gross proceeds only, with cost-basis reporting phasing in for 2026 transactions. Assets you transferred in from elsewhere show up with unknown basis that you must supply yourself, and DeFi platforms issue no 1099-DA at all.

Anneke de Vries covers tax and regulation for HOGE Wire.