PANews reported on May 14 that according to The Block, Republican Senators Cynthia Lummis and Bernie Moreno jointly wrote to the Secretary of the Treasury, requesting clarification of the tax treatment rules for unrealized gains in digital assets. The lawmakers pointed out that the current Corporate Alternative Minimum Tax (CAMT) conflicts with the new market value valuation rules of the Financial Accounting Standards Board (FASB), which may cause companies to pay taxes for unrealized cryptocurrency appreciation.
According to the Inflation Reduction Act of 2022, companies with average annual revenue of more than $1 billion for three consecutive years will be subject to a minimum tax of 15%. The new FASB rules require companies to measure digital assets at market prices, which improves the financial statements of companies holding Bitcoin such as MicroStrategy, but also brings potential tax burdens for unrealized gains. Cynthia Lummis and Bernie Moreno warned that without clear exemption guidance, companies may be forced to sell digital assets to pay taxes, which will inhibit industry innovation. They asked the Treasury Department to refer to the tax exemption policy for unrealized gains in stocks and introduce a transitional solution as soon as possible. The Treasury Department has not yet responded publicly to this.
