The U.S. House Ways and Means Committee voted 38-5 on September 16 to advance the Digital Asset Tax Clarity Act (H.R. 10357), sending a broad tax framework covering crypto payments, stablecoins, trading, lending, staking and mining to the full House for consideration. After adopting substitute language proposed by Chairman Jason Smith, the committee agreed to formally report the amended bill to the House.
The vote marks substantive progress toward what the crypto industry regards as the first relatively comprehensive U.S. framework for taxing digital assets. Industry groups welcomed the committee action but said several priorities remain unresolved, particularly a tax exemption for small everyday payments and the point at which staking and mining rewards should be recognized as income.
$10 fee exemption remains narrowly targeted
For dispositions taking place after December 31, 2027, H.R. 10357 would generally exclude capital gains or losses when digital assets are used to pay eligible network or transaction fees of no more than $10. For transaction fees, the asset used to pay the fee would generally also have to be the same type of asset involved in the underlying transfer.
The provision addresses a tax issue created after the Internal Revenue Service classified digital assets as property. When users pay blockchain fees with cryptocurrency, the payment itself can be treated as a taxable disposition, even when the amount is small and the calculation involves only a limited change in the asset's value.
Alison Mangiero, chief strategy officer and head of U.S. policy at the Crypto Council for Innovation, said the committee vote was an important step, while noting that Congress could still broaden the proposed "de minimis" exception for routine digital-asset transactions. The current $10 rule is focused mainly on qualifying network and transaction fees and does not create a general tax exemption for small purchases made with crypto assets.
The bill would also provide special tax treatment for qualifying dollar-denominated stablecoins and create a simplified accounting election for frequently traded digital assets. Other provisions would extend selected tax treatments from traditional financial markets to the digital-asset sector, including a lending safe harbor, mark-to-market treatment for qualifying dealers and traders, and simplified rules for certain charitable donations. The committee said the measures are intended to narrow differences between the tax treatment of digital assets and traditional financial instruments.
Digital assets would enter wash-sale rules
The bill would not only provide targeted relief. It would extend wash-sale and constructive-sale rules to digital assets, limiting tax strategies that rely on differences in the existing rules. Cryptocurrencies have generally fallen outside wash-sale provisions that apply to securities and other financial instruments, giving investors more flexibility in some transaction structures.
If enacted, the measure would require digital-asset investors to reassess the tax implications of selling positions at a loss, repurchasing them over a short period and maintaining related exposures. The precise scope and implementation would depend on the remaining legislative process and rules issued by the Treasury Department.
Staking income timing remains unresolved
The timing of tax recognition for mining and staking rewards remains one of the industry's most immediate concerns. The bill would classify income generated through digital-asset validation activities as ordinary income and establish sourcing rules based on the taxpayer's location or the site of the relevant business operations. It would also allow qualifying investment trusts to participate in staking without losing their trust status solely because they conduct staking activities.
However, the current text does not include the tax-deferral approach contained in some earlier proposals. That approach would have allowed qualifying miners and staking participants to defer recognition of newly received tokens until the tokens were sold. H.R. 10357 therefore clarifies the character of income from validation activities but does not resolve the industry's concern over when that income should be recognized.
The distinction is particularly important for operators that do not receive cash at the same time as their rewards. If reward tokens are included in taxable income when received, miners and validators could incur a tax liability before selling the assets. A subsequent decline in the token price could then leave taxpayers facing a gap between the acquisition tax basis and the value ultimately realized.
Treasury guidance sought for offshore DAOs
The bill also addresses crypto organizations established outside the United States. It would require the Treasury Department, within 12 months of the bill's effective date, to issue guidance on the tax treatment of foreign entities associated with decentralized autonomous organizations, or DAOs. The guidance would cover how qualifying foundations could reorganize as U.S. corporations and whether a temporary safe harbor should be made available to entities established before September 14.
Miles Jennings, policy lead and general counsel at a16z crypto, said the provisions could give founders clearer rules and provide some crypto foundations with a path back to the United States through a domestic tax structure. Mangiero also described the DAO provisions as potentially relevant to where crypto projects incorporate and where jobs are located, while emphasizing that the bill still requires technical changes.
H.R. 10357 has now moved from the House Ways and Means Committee into the next stage of House consideration. Key issues for the industry include whether the $10 fee rule will be broadened, whether staking and mining rewards will receive deferred tax treatment, and how the wash-sale provisions and rules for offshore DAOs will ultimately be implemented.