Application of constructive sale rules to digital assets

(a) In general Section 1259 of the Internal Revenue Code of 1986 is amended— (1) in subsection (b)(1), by inserting ‘‘digital asset (other than a qualified U.S. dollar stablecoin),’’ after ‘‘debt instrument,’’, and (2) in subsection (c)— (A) in paragraph (2), by inserting or widely traded digital asset after marketable security (as defined in section 453(f)), and (B) by adding at the end the following new paragraph: (5) Treatment of tokenized digital assets as substantially identical to economically equivalent financial property A tokenized digital asset (or a bridged digital asset with respect to which the reference digital asset is a traded digital asset) shall be treated as substantially identical to any stock, debt instrument, partnership interest, or widely traded digital asset if such tokenized digital asset (or such bridged digital asset) is economically equivalent to such stock, debt instrument, partnership interest, or widely traded digital asset.. (b) Effective date (1) In general The amendments made by this section shall apply to constructive sales after the date of enactment of this Act. (2) Rule of construction No transaction entered into on or before the date of enactment of this Act shall be deemed to cause or result in a constructive sale by reason of the amendments made by this section.