Trump Meets Senators on CLARITY Act: What It Means for Your Crypto Tax

On 17 July 2026, President Trump sat down with a group of US senators to discuss the CLARITY Act, a proposed piece of legislation that could reshape how crypto is taxed in the US and how digital assets are classified under federal law. If you hold Bitcoin, trade altcoins, or earn yield through DeFi protocols, this meeting matters to you. The CLARITY Act is not law yet, but White House-level engagement signals that the legislative timeline could accelerate faster than most holders expect.

What Is the CLARITY Act?

The CLARITY Act is a proposed US federal bill designed to draw a cleaner line between which digital assets are securities and which are commodities. That distinction is not just a regulatory technicality. It determines which federal agency, the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC), has primary oversight over a given token, and it shapes the tax treatment that flows from that classification.

The Securities vs. Commodities Split

Under current US law, the legal status of most cryptocurrencies sits in a grey zone. The SEC has argued that many tokens qualify as securities under the Howey test, while the CFTC has long treated Bitcoin and Ether as commodities. The CLARITY Act aims to codify a cleaner framework: assets that are sufficiently decentralised would likely fall under CFTC oversight as commodities, while tokens tied to an active development team and investor profit expectations could remain within the SEC's remit.

Why does this matter for your crypto tax report? Because securities and commodities can carry different reporting obligations, different treatment for wash-sale rules, and potentially different holding-period rules. If the CLARITY Act passes in something close to its current form, the classification your tokens receive could directly affect the calculations you or your accountant run to figure out what you owe each year.

Where the Bill Stands Right Now

As of the 17 July meeting, the CLARITY Act is still a proposal working its way through the Senate. The White House sit-down is significant because it shows the executive branch is actively lobbying senators to move the bill forward, but no vote has been scheduled and no final text has been signed into law. The meeting was reported by Politico, citing sources familiar with the discussions.

How Is Crypto Taxed in the US Right Now?

Before diving into what might change, it helps to know where things stand. The IRS treats cryptocurrency as property, not currency. That single classification drives almost every US crypto tax obligation you already have.

Capital Gains: Short-Term vs. Long-Term

When you sell, swap, or spend crypto, you trigger a taxable disposal. If you held the asset for one year or less, any gain is taxed at your ordinary income rate, which can reach 37% at the top bracket. Hold for more than a year, and the gain qualifies for the long-term capital gains rate, currently capped at 20% for high earners, with 0% and 15% brackets below that. Using a crypto tax calculator to separate your short and long-term positions is essential because mixing them up can mean a significantly larger bill than you actually owe.

Ordinary Income Events

Not every crypto transaction is a disposal. Mining rewards, staking income, airdrops, and certain DeFi yield payments are typically treated as ordinary income at the fair market value on the date you receive them. That income then becomes your cost basis for the asset, which matters when you eventually sell. Getting this wrong, or missing it entirely, is one of the most common errors the IRS flags on crypto returns.

The Wash-Sale Gap

One area the CLARITY Act could close is the wash-sale loophole. Under current law, the wash-sale rule, which prevents you from claiming a loss if you rebuy a substantially identical asset within 30 days, applies to securities but not to property. Because crypto is classified as property, US holders can currently sell at a loss, buy back immediately, and still claim the tax loss. If the CLARITY Act reclassifies many tokens as securities, that loophole closes for those assets. Planning your loss-harvesting strategy before any reclassification takes effect is a smart move.

What the White House Meeting Actually Signals

Presidential involvement in a legislative push is not unusual for high-priority bills, but it does accelerate the political timeline. The fact that senators are being brought directly to the table suggests the administration is treating crypto market structure as a genuine policy priority in 2026, not a background item. That is a different posture from previous years, when crypto legislation repeatedly stalled in committee.

Potential Timeline and What to Watch

No date for a Senate floor vote has been confirmed. What holders should watch for is whether the bill clears the relevant Senate committee, which would mean a floor vote becomes possible. Any amendment language around taxation, reporting thresholds, or broker definitions would be especially relevant to individual filers. The IRS has separately been expanding its crypto reporting infrastructure, as covered in our piece on how IRS audit expansion could affect your crypto taxes, and the CLARITY Act would sit on top of that existing enforcement environment.

Practical Steps for US Crypto Holders Right Now

Legislation takes time, but your next tax filing doesn't. Here's what you can do now, regardless of how the CLARITY Act progresses.

Get Your Records in Order

Every taxable event needs a date, a cost basis, and a proceeds figure. If you've traded across multiple exchanges or wallets, pulling those records together manually is time-consuming and error-prone. A crypto tax calculator that aggregates transaction data across platforms can save hours and reduce the risk of under-reporting, which is increasingly on the IRS radar. Our guide to what the IRS 2026 filing season means for crypto taxpayers sets out what the agency is prioritising this year.

Revisit Your Cost-Basis Method

The IRS permits several accounting methods for crypto: FIFO (first in, first out), HIFO (highest in, first out), and specific identification. Choosing the right method for your situation, especially if you've accumulated positions at different price points over several years, can materially affect your tax bill. The CLARITY Act does not propose to change cost-basis rules directly, but any shift in asset classification could affect which methods remain available for particular tokens.

Consider Loss-Harvesting Before Any Reclassification

If the wash-sale rule eventually extends to tokens reclassified as securities, the window to use crypto's current property status for tax-loss harvesting could narrow. Holders who want to lock in losses before any legislative change takes effect should speak to a tax professional about whether that strategy makes sense for their portfolio. This is not financial advice, and timing any trade around unconfirmed legislation carries its own risks.

Stay Informed on Broker Reporting

Separately from the CLARITY Act, IRS broker reporting rules for crypto are already in motion. Centralised exchanges are expected to begin issuing 1099-DA forms covering 2025 transactions, with the first forms reaching users in early 2026. The CLARITY Act could affect which platforms are classified as brokers and therefore subject to those reporting requirements, which would in turn affect what data lands in your mailbox before you file.

What Changes Under the CLARITY Act and What Stays the Same

It's easy to read a headline about new crypto legislation and assume everything will be different. In reality, many of the fundamentals are unlikely to shift dramatically, at least in the near term.

What Is Likely to Stay the Same

The IRS property classification is a matter of agency guidance and long-standing precedent, not something the CLARITY Act directly overrides. Capital gains treatment for disposals is not targeted for removal. Ordinary income treatment for mining and staking rewards is not on the table in the current bill text. Your obligation to report every taxable event, regardless of whether a form arrives from an exchange, remains unchanged.

What Could Genuinely Change

The clearest potential changes are: which regulator oversees which tokens, whether the wash-sale rule extends to newly classified securities, which platforms qualify as regulated brokers with reporting duties, and potentially how DeFi protocols are treated under federal oversight. Each of those changes ripples into tax calculations, but the ripple takes time. Legislation, regulatory guidance, and IRS rule-making are separate processes that don't all move at the same speed.

For context on how regulatory shifts affect tax treatment in other jurisdictions, the crypto compliance and reporting overview explains the broader international landscape and where the US sits within it.

Source: Cointelegraph