Trump could net big tax windfall in crypto Bill divestiture plan

WASHINGTON - The bipartisan ethics proposal senators have pitched to US President Donald Trump to get landmark crypto legislation over the line in Congress could trigger a significant tax benefit for the president: the ability to defer capital gains levies on his crypto holdings.

The ethics addendum to the crypto Bill, which has yet to be released publicly and is still being negotiated between the White House and lawmakers, includes a provision requiring the president to divest from crypto-related businesses, according to people familiar with the matter, who asked for anonymity to discuss non-public matters.

Forced divestiture is expected to allow the president to defer paying any federal taxes on those gains potentially for years – if ever, the people said.

The tax benefit allowing him to plow the proceeds from the sale of his crypto holdings into new investments could be worth millions in tax savings for the president, who reported earning US$1.4 billion (S$1.8 billion) from crypto and memecoin-related ventures in 2025. If he held his new, post-divestiture investments until death, the capital gains would go untaxed.

It’s not yet clear if the ethics proposal, hashed out by Republican Senator Thom Tillis of North Carolina and Democratic Senator Ruben Gallego of Arizona, could undergo more changes to win Trump’s agreement.

Representatives for the White House, Gallego and Tillis’ offices did not respond to requests for comment.

Without tax deferral, Trump could be forced to immediately pay a 20 per cent capital gains tax on the difference between what he paid for an asset and what he sells it for.

Trump is a major investor in World Liberty Financial, where his affiliated company DT Marks DEFI LLC holds a 38 per cent stake.

The discussions about inserting an ethics agreement with the divestiture and tax deferral language into the bill are central to unlocking a bipartisan deal to pass the long-stalled Clarity Act prized by the crypto industry.

Senate Majority Leader John Thune and other senior Republicans have been pushing for holding a procedural vote on the legislation ahead of the Senate’s August recess, which is slated to begin in the coming days.

The divestiture and deferral proposal would impose a new requirement on Trump, who unlike his top cabinet officials, isn’t currently required to sell his assets while serving in public office.

Other top Trump officials, including Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, have already availed themselves of a special tax provision that allows senior officials to avoid paying capital gains tax on divestments.

The proposed ethics deal would also allow state attorneys general to file lawsuits to enforce ethics measures if the Justice Department declines to do so, according to the people familiar. BLOOMBERG