U.S. Congress Renews Push to Extend Wash Sale Rules to Cryptocurrency Investors

According to CNBC, a bipartisan group of U.S. lawmakers is renewing efforts to extend wash sale rules to cryptocurrencies through the "Applying Existing Tax Anti-Abuse Rules to Digital Assets Act" (H.R. 9172), referred to the House Ways and Means Committee.

Under current U.S. tax law, cryptocurrencies are classified as property rather than securities, allowing investors to sell assets such as bitcoin or ether at a loss and immediately repurchase them while claiming the tax deduction. The proposed legislation would eliminate this advantage by applying the same wash sale and constructive sale restrictions that already apply to stocks and other traditional investments. If passed, crypto investors would need to wait before repurchasing the same digital asset to claim losses, significantly changing year-end tax planning strategies during periods of market volatility.