US Treasury Softens Crypto Tax Rules, Easing Pressure On Bitcoin Taxes

"The U.S. Treasury Department has issued new guidance clarifying that unrealized gains on digital asset holdings will not be subject to the Corporate Alternative Minimum Tax (CAMT), a move that spares companies like Michael Saylor's Strategy from potentially billions of dollars in phantom tax liabilities. The decision marks a pivot from the Biden-era tax framework and comes as debate picks up in Congress over how to regulate and tax digital assets. Even today there is a hearing on crypto taxation in the Senate Finance Committee."

"Under Financial Accounting Standards Board (FASB) rules, companies must "mark-to-market" cryptocurrency holdings on their books, recording paper gains and losses as if the assets were sold at current prices. That accounting treatment had raised alarms: while unrealized stock gains are excluded from CAMT, digital assets, like Bitcoin, were not explicitly exempt. For firms like Strategy, who aim to hold one trillion-dollars worth of Bitcoin, the distinction could have translated into tens of billions in annual tax bills on unrealized profits."

"The Treasury's latest guidance excludes digital assets from CAMT liability, effectively leveling the playing field with equities and bonds. Bitcoin tax relief and industry pushback This change comes after months of lobbying from industry heavyweights. In May, Strategy and Coinbase submitted a joint letter to the Treasury urging the exemption, arguing that taxing unrealized crypto gains was unfair, unconstitutional, and risked pushing American firms offshore."

The U.S. Treasury Department issued guidance excluding unrealized gains on digital asset holdings from the Corporate Alternative Minimum Tax (CAMT). CAMT, enacted in 2022, imposes a 15% minimum tax on corporations with over $1 billion in annual income based on financial statement income. Financial Accounting Standards Board rules require companies to mark-to-market cryptocurrency holdings, recording paper gains and losses at current prices. That accounting treatment risked creating large CAMT liabilities for firms holding substantial crypto positions. The guidance aligns treatment of digital assets with equities and bonds. Lobbying from firms like Strategy and Coinbase influenced Treasury consideration, and the clarification reduces tax uncertainty for corporate bitcoin holdings.

Read at Bitcoin Magazine