Bipartisan U.S. lawmakers propose crypto asset divestment plan, which could allow Trump to save millions of dollars in taxes

Source: Global Market Watch

In an effort to push a landmark cryptocurrency bill through Congress, U.S. senators have presented Donald Trump with a bipartisan ethics proposal, which could bring him a major tax benefit: the ability to defer paying capital gains tax on his cryptocurrency holdings.

According to sources familiar with the matter who requested anonymity due to discussions involving non-public information, the ethics provisions attached to the cryptocurrency bill have not yet been publicly released. The White House and members of Congress are still negotiating, with one provision requiring the president to divest from crypto-related businesses.

The sources stated that a mandatory divestment is expected to allow Trump to delay paying federal taxes on relevant gains for several years, or potentially avoid paying them altogether.

Under this tax benefit, if he reinvests the proceeds from selling cryptocurrency into new investments, he could save millions of dollars in taxes. According to Trump’s annual financial disclosures, he is set to earn at least $1.4 billion through crypto and meme coin-related businesses in 2025. If he holds the new investments until his death after divesting, the associated capital gains would not be subject to taxation.

It is not yet clear whether further revisions will be made to the ethics proposal to secure Trump’s agreement. The proposal was introduced by Republican Senator Thom Tillis of North Carolina and Democratic Senator Ruben Gallego of Arizona.

Without the deferred taxation arrangement, Trump may have to immediately pay a 20% capital gains tax.

Trump is the principal investor of World Liberty Financial, and his affiliated company DT Marks DEFI LLC holds a 38% stake in the company.

The highly anticipated Clarity Act, which is vital to the cryptocurrency industry, has stalled. Including an ethics agreement with both asset divestment and deferred tax clauses in the bill is key to securing bipartisan support. Senate Majority Whip John Thune and other senior Republicans hope to hold a procedural vote on the bill before the Senate recess in August. The Senate is expected to begin recess in the coming days.