BlockBeats News, October 1st, according to cryptoinamerica, the US Treasury Department is preparing to formally relax a tax proposal that originally would have required companies like Michael Saylor’s Strategy to pay billions of dollars in taxes on unrealized Bitcoin gains under the Biden-era Corporate Alternative Minimum Tax (CAMT) regulations. CAMT stipulates a 15% minimum tax on large companies’ financial statement income.
Due to the current requirement by the Financial Accounting Standards Board (FASB) for companies to use the “fair value” accounting standard for crypto assets (meaning unrealized gains and losses must be recorded at current market prices regardless of whether they are sold), this means that unrealized Bitcoin gains would be taxed while unrealized stock gains would be exempt. This poses a significant potential tax burden on companies like Strategy, which hold around $73 billion in Bitcoin.
The proposal has been met with joint opposition from Strategy and Coinbase. In May of this year, both companies sent a joint letter to the Treasury Department urging for an exemption of taxes on unrealized crypto gains, pointing out the unfair differential tax treatment between digital assets and traditional stocks and bonds. They warned that taxing book profits may force companies to sell Bitcoin only to pay taxes, putting US companies at a disadvantage in international competition and even raising constitutional questions about the nature of taxing “phantom income.”
With the US Congress and the Trump administration recently advancing digital asset tax legislation, this issue has been receiving increasing attention. At 10 AM this morning, the Senate Finance Committee will hold a cryptocurrency tax hearing to continue the relevant discussions.
