Short answer: under current law, the wash sale rule doesn't apply to crypto you hold as property. Section 1091 of the tax code disallows losses on "stock or securities" when you buy back substantially identical shares within 30 days, and the IRS treats virtual currency as property (Notice 2014-21). But a bill now moving in Congress would extend the rule to crypto, starting with sales made after September 14, 2026, if it's enacted.
What the rule does today
For stocks, if you sell at a loss and buy the same or a substantially identical security within 30 days before or after the sale, the loss is disallowed and added to the basis of the new shares. Because crypto held directly isn't stock or a security, investors have been able to sell a coin at a loss, rebuy it, and still claim the loss.
Exceptions already exist: crypto ETFs and other securities are covered, and the IRS instructions for Form 1099-DA have brokers report disallowed wash sale losses on tokenized securities in box 1i.
What H.R. 10357 would change
- The Digital Asset Tax Certainty Act (H.R. 10357) was introduced on September 14, 2026, and approved by the House Ways and Means Committee on September 16, 2026.
- Section 301 rewrites Section 1091 to cover "specified assets," meaning stock, securities and any traded digital asset other than a qualified U.S. dollar stablecoin. Wrapped and tokenized versions that are economically equivalent count as substantially identical.
- It exempts coins acquired through validation (staking or mining) and regular periodic acquisitions you report as ordinary income.
- Effective date: as introduced, it applies to dispositions after the date the bill was introduced, so a loss sale and buyback after September 14, 2026 could be caught if the bill becomes law in this form.
- For broker reporting, sales before January 1, 2028 can show basis without the wash sale adjustment, so your 1099-DA may not reflect it. You would have to track it yourself.
As of October 21, 2026 the bill hasn't passed the House or Senate, and its final text could change.
What this means for year-end tax-loss harvesting
- Harvesting losses is still allowed. The open question is only whether an immediate buyback keeps the loss.
- If you want to avoid the risk, wait more than 30 days to rebuy, or don't rebuy the same coin (including its wrapped version).
- Keep records of every sale and rebuy date. If the rule is enacted retroactively, you or your CPA will need them to adjust basis.
- Losses offset gains first. Beyond that you can deduct $3,000 a year ($1,500 if married filing separately) and carry the rest forward.
A crypto tax tracker helps you see your lots and losses before you sell. CoinLedger includes tax-loss harvesting tools, and both it and Koinly produce Form 8949 (how to file). Compare them in our software roundup.
Large positions, a big loss, or unsure how a retroactive rule would hit you? This is a good year to talk to a crypto CPA before December 31. Browse the crypto CPA directory or find one in your state.
Sources: H.R. 10357 text, Congress.gov; Forvis Mazars on the Ways and Means vote; IRS Instructions for Form 1099-DA; IRS Topic 409 (all retrieved 2026-10-21). Software links are affiliate links; CoinLedger code CRYPTOTAX10 gives 10% off. Disclosure. General information, not tax advice.
FAQ
Can I sell crypto at a loss and buy it back right away?
Under current law, generally yes for crypto held as property. Section 1091 disallows wash sale losses on stock or securities, and the IRS treats virtual currency as property. A pending bill, H.R. 10357, would extend the rule to traded digital assets for dispositions after September 14, 2026, but only if it becomes law.
Do crypto ETFs follow the wash sale rule?
Yes. Shares of an ETF are securities, so the normal 30-day wash sale rule already applies to them. The IRS also has brokers report wash sale losses for tokenized securities in Form 1099-DA box 1i.
How much of a crypto loss can I deduct?
Capital losses first offset capital gains. If losses exceed gains, you can deduct up to $3,000 a year ($1,500 if married filing separately) against other income and carry the rest forward, per IRS Topic 409.
Has H.R. 10357 passed?
As of October 21, 2026, no. The House Ways and Means Committee approved it on September 16, 2026. It still needs a House vote, Senate passage and a signature to become law.