tl;dr
Two US senators, Cynthia Lummis and Bernie Moreno, have urged the Treasury Department to prevent the corporate alternative minimum tax (CAMT) from taxing US firms on unrealized gains in digital assets caused by new accounting standards. They requested regulatory guidance to exclude these unrealized ...
Two US senators, Cynthia Lummis and Bernie Moreno, have urged the Treasury Department to exclude unrealized crypto gains from corporate alternative minimum tax (CAMT) calculations. They warned that marking unrealized gains under new mark-to-market accounting rules could force US firms to sell digital assets prematurely to cover tax liabilities, putting them at a competitive disadvantage compared to foreign companies.
The problem arises from the Inflation Reduction Act’s CAMT provision interacting with updated accounting standards set by the Financial Accounting Standards Board (FASB). Although these standards intended to fairly reflect crypto asset values, they unintentionally subjected unrealized crypto gains to taxation for firms with adjusted financial statement income (AFSI) averaging $1 billion or more.
Senators Lummis and Moreno emphasized that neither Congress nor FASB intended for unrealized gains to be taxed this way. They called on Treasury Secretary Scott Bessent to use his regulatory authority to clarify the definition of AFSI and exclude unrealized crypto gains, citing a 2023 IRS notice that provided interim relief to the insurance sector as precedent.
Meanwhile, the Cedar Innovation Foundation, affiliated with the crypto political action committee Fairshake, pressed Senate leadership to promptly pass stablecoin legislation. They warned that delays threaten US market competitiveness and consumer protection, advocating for clear, supportive regulatory frameworks to help the crypto industry thrive domestically.