US Treasury Plans to Ease CAMT Rule on Unrealized Bitcoin Gains
The US Treasury's updated guidance ensures that unrealized cryptocurrency gains, including Bitcoin and Ethereum, are excluded from the 15% Corporate Alternative Minimum Tax, benefiting companies like MicroStrategy and Bitmain.
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Summary
The U.S. Treasury and IRS have clarified that companies can exclude unrealized cryptocurrency gains from the 15% Corporate Alternative Minimum Tax (CAMT). This decision addresses concerns from companies like MicroStrategy, which holds significant unrealized Bitcoin gains, and Bitmain, which holds substantial Ethereum investments. The change comes after lobbying efforts to prevent multi-billion-dollar tax risks under new accounting rules requiring fair market valuation of crypto holdings.
Terms & Concepts
- Corporate Alternative Minimum Tax (CAMT): A US tax policy requiring large corporations to pay a minimum tax based on financial statement income rather than taxable income.
- Unrealized Gains: The increase in an asset's value that has not yet been realized through a sale or transaction.