Senators pushing an ethics clause that would force President Donald Trump to sell his crypto holdings are divided over a provision that would let him defer the capital gains tax on that sale instead of paying it upfront. Bloomberg reports the White House and lawmakers are still negotiating the addendum and have not released its text.
Some senators want President Trump to divest his cryptocurrency holdings over conflict-of-interest concerns, but the proposed ethics clause would allegedly let him postpone the capital gains tax on that sale rather than pay it all at once, according to Bloomberg.
How the ethics clause would treat Trump's holdings
Capital gains tax is normally triggered when appreciated assets are sold. Trump's crypto holdings have probably grown in value to $1.456 billion, marking $88 million in profit, so a forced sale without a deferral clause could bring a sizable tax bill.
The proposed clause would allegedly allow Trump to postpone those capital gains taxes instead of paying them at once. Tax deferral only delays the due date, though — it does not eliminate the taxes owed.
Lawmakers split over the deferral provision
Lawmakers from both parties have raised concerns that Trump's role in shaping crypto policy could overlap with his personal holdings, and some senators have proposed the ethics clause requiring him to sell those assets. The proposal aims to shield public officials from an immediate tax bill when ethics rules force them to divest.
Critics argue the provision could give Trump a substantial financial advantage. Supporters counter that it is a standard safeguard for officials forced to sell investments. Bloomberg reported that the White House and lawmakers were still negotiating the ethics addendum and had not released its text publicly, so the final language, eligibility rules, and tax treatment could still change before lawmakers introduce or vote on the legislation.
CLARITY Act still stalled
The debate follows seven draft crypto tax bills reviewed during a House Ways and Means Committee hearing in June. The CLARITY Act (H.R. 3633) is seen as necessary to provide regulatory certainty and support broader crypto adoption, but the most recent Senate schedule does not list it as an immediate priority, and uncertainty around its approval has grown.
Source: AMBCrypto
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