Digital Asset Tax Certainty Act: What the New Proposals Mean for Stablecoin and NFT Accounting
H.R. 10357, the Digital Asset Tax Certainty Act, has cleared the House Ways and Means Committee, and it signals the most significant potential shift in US digital asset taxation since the IRS's 2014 property notice. For accounting firms advising corporate clients, CFOs managing treasury positions in stablecoins, and practitioners preparing digital asset returns, the bill's proposals on wash-sale rules, conversion transactions, and straddle rules will require a hard look at how existing positions have been reported and how strategies may need to change once the legislation is enacted.
The Current Framework and Its Limits
The IRS Notice 2014-21 established the baseline: digital assets are property for federal tax purposes. That single characterisation has governed everything from Bitcoin spot trades to NFT sales and stablecoin transfers for more than a decade. Property treatment is neither uniformly good nor bad, but it creates a pronounced gap between how exchange-traded digital assets and exchange-traded securities are handled under the Internal Revenue Code.
Where the property regime creates tension
Because digital assets are property rather than securities, several rules that apply to stocks and bonds simply do not reach them. The wash-sale rules under IRC Section 1091, which disallow loss recognition when a taxpayer sells a security and reacquires a substantially identical one within 30 days, currently have no application to crypto or NFTs. A taxpayer can sell Bitcoin at a loss on 30 December, repurchase it on 31 December, and still claim the loss. That asymmetry has been a planning tool for years, but it is exactly the kind of inconsistency that Congress is now targeting.
Similarly, the constructive-sale rules, the conversion-transaction rules that prevent monetising appreciated stock without recognising gain, and the straddle rules that limit the timing of loss recognition on offsetting positions all apply to securities but not, under current law, to digital assets treated as property. The result is a code that effectively subjects a share of Apple traded on Nasdaq to a stricter set of anti-abuse provisions than an equally liquid token traded on a crypto exchange.
On the other side of the ledger, property treatment also creates friction. Donating publicly traded stock to a charity above $500 does not require a qualified appraisal because the stock falls within a defined exception. Donating digital assets, however, does require an appraisal because those assets are not "publicly traded securities" under current law, adding cost and complexity to straightforward philanthropic transfers.
What H.R. 10357 Actually Proposes
The bill's overarching design is parity: if a digital asset trades on an exchange in a manner that looks and functions like a stock or bond, it should largely be subject to the same rules. Howard Wagner of the Forvis Mazars Washington National Tax Office, speaking on the firm's Tackling Tax podcast, described the approach as "harmonisation," noting that the legislation attempts to balance certainty for the crypto industry with anti-abuse guardrails that have long applied to conventional securities markets.
The three anti-abuse provisions drawing most attention
Wagner highlighted three specific provisions as the most consequential for practitioners to track:
Wash-sale rules. The bill would extend IRC Section 1091 wash-sale treatment to widely traded digital assets. That means loss harvesting strategies that rely on the current exemption would no longer work once the legislation takes effect. Firms advising clients who have been systematically harvesting crypto losses at year-end should begin documenting those historical positions now, before any enactment date resets the landscape.
Conversion transaction rules. These provisions prevent a taxpayer from locking in the economic value of an appreciated asset while deferring the tax gain, typically by entering into an offsetting financial arrangement. Extending them to digital assets would curtail certain structured arrangements involving appreciated tokens that currently escape the securities-law equivalent.
Straddle rules. IRC Section 1092 limits the ability to recognise losses on one leg of an offsetting position when the other leg is still open and carrying an unrealised gain. The bill's proposal to apply this to digital assets would affect trading desks and corporate treasury operations that manage paired long/short positions in tokens.
Stablecoin accounting under the proposals
One of the more practically significant elements involves stablecoins. Under current property-treatment rules, every stablecoin transfer is potentially a taxable event, even though a well-functioning stablecoin pegged to the dollar should not, in economic substance, generate a gain or loss. The bill would provide specific tax certainty for stablecoin transactions, addressing one of the longest-standing compliance pain points for corporate treasuries that use stablecoins for payments, settlements, or payroll processing. The precise mechanism of that certainty provision will matter enormously for stablecoin accounting, and practitioners should track the legislative text closely as it moves through the chamber.
NFT accounting and charitable donation parity
The appraisal harmonisation proposal is directly relevant to NFT accounting. Under the bill, widely traded digital assets donated to charity would qualify for the same appraisal exemption that applies to publicly traded stock. For clients holding appreciated NFTs or other tokens who have charitable giving in their plans, this change could reduce compliance friction substantially. That said, NFTs vary enormously in liquidity, and the "widely traded" threshold will determine which assets actually qualify.
Senate Activity and the Direction of Travel
Wagner noted that separate legislation introduced in the Senate in the days before the podcast recording is moving in the same direction as the House bill. Both chambers appear aligned on extending the wash-sale rules, the conversion-transaction rules, and the straddle rules to digital assets. That cross-chamber alignment is meaningful: it reduces the likelihood that any final legislation will simply strip those provisions out in conference, and it reinforces the planning assumption that the current wash-sale exemption for crypto has a limited remaining lifespan.
The bill remains in the House as of the recording date and has not yet been enacted. Nothing requires action today, but the direction of travel is clear enough to justify preparation now rather than after enactment.
Accounting and Tax Implications for Firms and CFOs
From a B2B perspective, the proposals carry several near-term implications that accounting firms and corporate financial officers should be working through now.
Reviewing historical loss-harvesting positions
Any client or entity that has systematically harvested crypto losses by selling and immediately reacquiring digital assets should have those positions inventoried. Depending on the effective date and any grandfathering provisions in the final legislation, previously claimed losses may need to be disclosed, and future strategies will need to be restructured. Firms should not wait for enactment to begin that review.
Stablecoin accounting policies in corporate treasuries
Companies that hold stablecoins on their balance sheets and account for them as indefinite-lived intangible assets under current GAAP, or that have adopted ASC 350-60 fair value accounting, will need to revisit their tax accounting policies once the stablecoin-specific provisions are enacted. The relationship between book treatment and tax treatment for stablecoin positions is already complex. Tax certainty on stablecoin transfers could simplify deferred tax calculations, but only if the entity's accounting team understands how the new provisions map onto their existing GAAP policy.
Technology and record-keeping readiness
Extending wash-sale, conversion-transaction, and straddle rules to digital assets will require substantially more granular transaction data. Firms using digital asset accounting software to track client positions should assess whether their current workflows can capture the 30-day repurchase windows, offsetting positions, and straddle legs that will become relevant once these rules apply. Systems that handle equities wash-sale tracking will not necessarily plug in seamlessly to crypto transaction data without configuration work.
NFT inventory and donation planning
Corporate or high-net-worth clients with NFT holdings who have deferred charitable giving partly because of the appraisal burden should note the potential change. If the appraisal exemption is extended to widely traded digital assets, the timing of donations could be worth revisiting in light of current fair values and the client's overall giving strategy.
Practical Steps Before Any Enactment
Wagner's advice on the podcast was straightforward: understand what you have done historically, understand how it has been treated, and identify where the new rules will change that treatment. That is the right framework. Translated into concrete steps for accounting professionals:
What to do now
First, map client digital asset activity against the three anti-abuse provisions. Which clients have harvested losses? Which hold paired positions that could be characterised as straddles? Which corporate treasuries have used conversion-style arrangements involving appreciated tokens?
Second, flag stablecoin accounting policies for review. The specifics of the certainty provision are still legislative text, not enacted law, but getting ahead of the policy review means less scrambling after the bill passes.
Third, document NFT holdings and their liquidity profile. Whether a given NFT qualifies as "widely traded" under whatever threshold the final bill sets will determine which appraisal rules apply to charitable transfers.
Fourth, engage advisors on effective-date planning. Wash-sale and straddle rules often include transition provisions. Understanding those provisions before enactment allows clients to make informed decisions about timing disposals or restructuring positions rather than reacting after the fact.
The Digital Asset Tax Certainty Act is not law yet, but the bipartisan trajectory and the cross-chamber alignment make some version of these changes increasingly likely. The firms that prepare their clients now will be the ones best positioned to advise them when the code finally catches up to how digital assets are actually being used.
Source: Forvis Mazars
Frequently Asked Questions
What is H.R. 10357, the Digital Asset Tax Certainty Act?
It is a bill that passed the House Ways and Means Committee and proposes to extend a range of securities-law tax rules, including wash-sale, conversion-transaction, and straddle provisions, to widely traded digital assets. It also includes specific certainty provisions for stablecoin transactions and would harmonise the charitable donation appraisal rules for digital assets with those for publicly traded stock.
Does the bill affect my ability to harvest crypto losses at year-end?
If enacted as proposed, yes. The wash-sale rules under IRC Section 1091 would apply to widely traded digital assets, meaning selling at a loss and reacquiring the same or a substantially identical asset within 30 days would disallow the loss. The current exemption that makes crypto loss harvesting straightforward would no longer be available for assets caught by the new rules.
How would the stablecoin provisions change accounting treatment?
The bill proposes tax certainty for stablecoin transactions, which would address the current position that every stablecoin transfer is a potentially taxable disposal. The precise mechanism is still in legislative text, not enacted law, but the intent is to reflect the economic reality that a dollar-pegged stablecoin used for payments should not generate taxable gain or loss in the way a speculative asset might.
Do the proposals affect NFT accounting specifically?
Yes, in two ways. First, the parity framework means that widely traded NFTs could become subject to the same anti-abuse provisions as securities. Second, the appraisal harmonisation proposal would remove the requirement for a qualified appraisal when donating a widely traded digital asset, including qualifying NFTs, to charity, aligning that treatment with publicly traded stock donations.
What should accounting firms advise clients to do before the bill becomes law?
The immediate priority is preparation, not transactions. Firms should map each client's digital asset activity against the three anti-abuse provisions, review stablecoin accounting policies, document NFT holdings and their liquidity, and identify where historical treatment will differ from the proposed rules. Effective-date and transition provisions in the final bill will drive timing decisions, so understanding those in advance is essential.