Investment trusts engaged in digital asset staking

(a) In general Section 7701(p), as added by section 4 of this Act, is amended by adding at the end the following new paragraph: (7) Status of trusts engaged in digital asset staking (A) In general An entity or arrangement shall not fail to be treated as a trust for purposes of this title solely by reason of the power of the trustee of such entity or under such arrangement to— (i) engage in staking digital assets held by the trust, (ii) retain or distribute digital assets received in connection with such staking, (iii) determine which digital assets held by the trust to use in staking, (iv) to the extent that any digital assets held by the trust are committed to staking, take measures necessary or appropriate to ensure that the trust has sufficient liquidity to make distributions in redemption of interests in the trust, including by purchasing the right to borrow money or digital assets to make such distributions, and (v) perform acts related to the exercise of the powers described in the preceding clauses of this subparagraph. (B) Not to apply to validating trade or business Subparagraph (A) shall not apply in the case of an entity or arrangement engaged in the active conduct of a trade or business of validating digital asset transactions. (C) Regulations The Secretary may prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this paragraph.. (b) Clerical amendment The heading for section 7701(p), as added by section 4 of this Act, is amended by inserting and special rules after Definitions. (c) Effective date The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.