Ethics Provision Requiring Trump to Sell His Crypto Businesses Could Let Him Defer Capital Gains Taxes

The bipartisan ethics proposal senators have offered President Donald Trump to unlock the Clarity Act could produce a substantial tax benefit for him, Bloomberg reported Thursday. The provision would require the president to divest from crypto-related businesses, and that forced sale is expected to let him defer federal taxes on the resulting gains for years, and possibly indefinitely, people familiar with the matter told Bloomberg.

The proposed ethics addendum has not been made public and remains under negotiation between the White House and lawmakers.

Trump reported more than $1.4 billion in crypto income for last year in a financial disclosure released in June, including roughly $636 million in memecoin royalties, about $594 million tied to World Liberty Financial, and close to $197 million from a stablecoin venture. Those figures make crypto the dominant source of his personal income.

The ethics fight has been the central obstacle to the bill for months. Trump had accepted language brokered by Senator Cynthia Lummis, but Democrats and Republicans including Senators Thom Tillis and Ruben Gallego, who sent the counter-proposal to the White House in late July. Senate Democrats have separately demanded hearings into the president’s crypto earnings. These disputes have fueled delays that have now pushed a Clarity vote to September.

Related Listen: Kristin Smith on Why the Clarity Act Comes Down to a Memecoin

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