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.
The CAMT, enacted in 2022, imposes a 15% minimum tax on corporations earning over $1 billion in annual income, based on their financial statement income rather than taxable income.
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.
IRS officials appear to have taken those concerns seriously. The guidance now offers regulatory clarity that could embolden more corporations to add bitcoin to their balance sheets without fear of unpredictable tax shocks.
Lummis: Taxing phantom gains doesn’t make sense
Senator Cynthia Lummis (R-Wyo.), one of Congress’s most vocal crypto advocates, welcomed the move as a victory for common sense.
Lummis said during remarks at the BTC in D.C. event Tuesday that the ruling helps American companies build Bitcoin treasuries without the risk of being punished for holding sound money.
Lummis has been pushing for broader tax reform around digital assets. Her latest bill proposed a de minimis exemption — excluding crypto transactions under $300 from taxation — and sought to ensure that lending digital assets is not treated as a taxable event.
Strategy’s treasury playbook
For Strategy, the IRS guidance is a tax win and a massive green light to continue scaling its Bitcoin-first corporate strategy.
CEO Michael Saylor has framed the company’s long-term mission as an accumulation of $1 trillion in Bitcoin reserves, positioning the cryptocurrency as a superior treasury asset compared to cash or bonds.
Had CAMT applied to digital assets, Strategy risked facing tens of billions in tax liability annually, potentially disrupting its accumulation strategy.
With the exemption secured, Saylor and other Bitcoin-treasury pioneers can now operate with fewer regulatory headwinds.
As previously stated, the Senate Finance Committee is holding a hearing Wednesday titled “Examining the Taxation of Digital Assets.”
The hearing comes against the backdrop of a looming government shutdown deadline, but committee officials confirmed that the crypto tax session will proceed regardless.
Source: https://bitcoinmagazine.com/business/us-treasury-softens-crypto-tax-rules-easing-pressure-on-bitcoin-taxes
