Mark-to-market election

(a) In general Section 475 of the Internal Revenue Code of 1986 is amended— (1) by redesignating subsection (g) as subsection (h), and (2) by inserting after subsection (f) the following new subsection: (g) Election of mark To market for dealers and traders in specified assets (1) Dealer in specified assets (A) In general In the case of a dealer in specified assets who elects the application of this paragraph, this section shall apply to such assets held by such dealer in the same manner as this section applies to securities held by a dealer in securities. (B) Revocation An election under subparagraph (A) may be made without the consent of the Secretary. An election, once made, shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary. (2) Trader in specified assets In the case of a person who is engaged in a trade or business as a trader in specified assets and who elects to have this paragraph apply to such trade or business as a trader in such assets, subsection (f)(1) shall apply to specified assets held by the trader in connection with such trade or business in the same manner as such subsection applies to securities held by a trader in securities. (3) Limitation The application of this subsection shall be limited to specified assets which are treated as actively traded. (4) Definitions For purposes of this subsection— (A) Specified asset The term specified asset means— (i) a digital asset, (ii) any notional principal contract with respect to a digital asset described in clause (i), or (iii) any evidence of an interest in, or a derivative instrument in, an asset described in clause (i) or (ii), including any option, forward contract, futures contract, short position, or similar instrument in such digital asset. (B) Dealer in specified assets The term dealer in specified assets means a taxpayer which— (i) regularly purchases specified assets from, or sells specified assets to, customers in the ordinary course of a trade or business, or (ii) regularly offers to enter into, assume offset, assign, or otherwise terminate positions in specified assets with customers in the ordinary course of a trade or business. (5) Regulations and guidance The Secretary may prescribe such regulations or other guidance as may be necessary to carry out the purposes of this subsection. (6) Termination This subsection shall not apply to taxable years beginning after December 31, 2035.. (b) Effective date The amendments made by this section shall apply to sales and exchanges in taxable years beginning after the date of enactment of this Act.