Congress Revives Tax Break Fight for Crypto Investors

A bipartisan group of US lawmakers is pushing to eliminate a tax break that has benefited cryptocurrency investors. The proposal targets the 'wash sale' rule, which prevents stock investors from selling at a loss and immediately repurchasing to claim a tax deduction.

Cryptocurrencies are treated as property rather than securities under the US tax code, allowing investors to sell assets like Bitcoin or Ether at a loss and still claim the realized loss for tax purposes.

The legislation, known as the Applying Existing Tax Anti-Abuse Rules to Digital Assets Act, would extend existing wash sale and constructive sale rules to cryptocurrencies. Supporters argue that this would close an unintended gap in the tax code by putting digital assets on equal footing with traditional investments.