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Crypto Wash Sale Rule in 2026: What Applies, What Doesn't

As of October 17, 2026, the wash sale rule does not generally apply to cryptocurrency held directly; Congress is considering changes; check current law. This page explains why and what could change. It is not a trading or tax-planning strategy.

What section 1091 says

Internal Revenue Code §1091 disallows a loss deduction when, within 30 days before or after a sale or other disposition of "shares of stock or securities," the taxpayer acquires "substantially identical stock or securities." The statute's term is "stock or securities" (including contracts or options to acquire or sell them).

Why crypto is generally treated differently

The IRS treats a digital asset as property, and general property tax principles apply (Form 8949 instructions). Section 1091 covers "stock or securities," not property generally. Our research notes indicate that the Joint Committee on Taxation has said digital assets are not expressly within §1091; we did not re-read that report for this page.

Exception: tokenized securities

Some digital assets are tokenized securities (they provide an interest in a security otherwise reported on Form 1099-B and are SEC-registered, with exceptions). For those, the Form 1099-DA instructions say brokers must report losses from wash sales in box 1i ("Wash Sale Loss Disallowed") in certain cases (same account, same CUSIP) and increase the basis of the replacement asset by the disallowed loss. On Form 8949, nondeductible wash sale losses use code W.

Box 1i appears on the form because of the tokenized-security rules; the instructions tie it to tokenized securities, not to a general crypto wash sale rule.

Bills that are not law

• H.R. 10357, Digital Asset Tax Certainty Act (introduced September 14, 2026): on September 16, 2026 the House Ways and Means Committee ordered it reported as amended, 38–5 (Congress.gov). It has not passed the House or Senate and is not law. Section 301 as introduced would amend §1091 to apply to "specified assets," including traded digital assets other than a qualified U.S. dollar stablecoin. A search summary of the bill indicates a proposed effective date after December 31, 2027; confirm in the bill text.
• Earlier proposals also existed (our research notes mention H.R. 9172); we did not re-verify them for this page.

None of these proposals is current law.

What to watch

• Congress.gov status of H.R. 10357 and any companion legislation.
• IRS guidance and the Form 1099-DA instructions (box 1i is already there for tokenized securities).
• State tax law, which may differ.

Why you shouldn't assume it stays this way

Rules can change, and other tax doctrines may apply to particular transactions. If you are considering selling a digital asset at a loss and buying it back, talk to a qualified tax professional about your facts. This page does not recommend any approach.

How this shows up on a 1099-DA and Form 8949

• Box 1i: wash sale loss disallowed (tokenized securities). If you believe the amount is wrong, the Form 8949 instructions use code W and an attached explanation when the amount is less than shown.
• Reporting a loss: see 1099-DA vs Form 8949 and wrong cost basis.

FAQ

Does the wash sale rule apply to Bitcoin in 2026? Not generally, as of October 17, 2026. It is a statement of current law, not a promise.

What about a stablecoin? Under H.R. 10357 as introduced, qualified U.S. dollar stablecoins would be excluded; the bill is not law.

What about NFTs? Not covered by the sources read; ask a professional.

Could the rule apply retroactively? The bill as described has a proposed effective date after 2027; any change would need to be enacted.

Can I rely on this page? It is general information with a last-verified date; check current law before acting.

What we could not verify

• Any enacted law or IRS guidance after October 17, 2026.
• The JCT statement (taken from research notes).
• H.R. 9172 status and effective-date wording in the final committee text.
• State-level treatment.

Sources

• 26 U.S.C. §1091 (Cornell LII) — https://www.law.cornell.edu/uscode/text/26/1091 (read October 17, 2026)
• Congress.gov, H.R. 10357 — https://www.congress.gov/bill/119th-congress/house-bill/10357 and actions page (read October 17, 2026); bill text https://www.congress.gov/119/bills/hr10357/BILLS-119hr10357ih.htm
• House Ways and Means Committee vote record, September 16, 2026 — https://waysandmeans.house.gov/wp-content/uploads/2026/09/09.16.26-Compiled-Votes.pdf
• IRS, Understanding your Form 1099-DA — https://www.irs.gov/businesses/understanding-your-form-1099-da (page updated June 28, 2026; read October 17, 2026)
• IRS, Instructions for Form 1099-DA (2026) — https://www.irs.gov/instructions/i1099da (read October 17, 2026)
• IRS, Instructions for Form 8949 (2025 revision) — https://www.irs.gov/instructions/i8949 (read October 17, 2026)

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Not tax advice. Examples use made-up figures. Nothing here has been reviewed by a tax professional. We may earn commissions from affiliate links where marked; see the disclosure.