Trump could owe hundreds of millions in taxes on $1.4 billion crypto earnings
President Trump’s recent financial disclosure has finally quantified the extent of his involvement in cryptocurrency ventures he’s been pursuing since returning to office. However, the revelation that he made $1.4 billion from the budding industry has reignited another mystery regarding his finances: how much is he paying in taxes?
The president’s cryptocurrency windfall seems to be taxable. An accountant specializing in cryptocurrency income mentioned it was reasonable to expect Mr. Trump would have to pay at least $250 million on this income.
Yet, several tax experts informed CBS News that Mr. Trump’s actual tax bill might be significantly lower, but determining the exact amount is challenging due to the lack of transparency surrounding the corporate entities managing the income. Unlike several past presidents, Mr. Trump does not make his tax returns public.
"What we know is that he did very well for himself, but we don’t know how the beneficial ownership is structured," said Omri Marian, a law professor specializing in cryptocurrency taxation. "This is like looking at a black box, and I can’t see inside."
The White House declined to respond to questions about any taxes Mr. Trump paid on the crypto income, whether it was taxed on an individual or business basis, and whether any operating losses were applied to his crypto-related tax bill.
If the entire $1.4 billion were to be taxed at a federal individual income rate, the president would owe the IRS $518 million, based on the maximum statutory rate of 37%, without accounting for potential deductions.
According to the IRS, digital assets are subject to the same capital gains taxes as transactions of traditional securities. But Marian noted that due to the limited descriptions of the income sources in his financial disclosure, it’s impossible to determine whether the money would be considered capital gains or ordinary income.
For example, the $625 million Mr. Trump received from his $TRUMP meme coin is described as a royalty from a licensing agreement with a company called Celebration Coins. According to the disclosure, World Liberty Financial, the crypto company he co-founded with his sons, paid him more than $590 million in proceeds from the sales of digital tokens and the sale of an equity stake in the business.
Then there is the question of whether the income is ultimately being paid to Mr. Trump personally or to a business associated with the president. The latter would command a lower corporate tax rate, but in either scenario, Mr. Trump could offset his gains with losses.
"It’s really, really difficult for me to say what the tax consequences are for him personally and for the entities involved, without knowing much more about them," Marian said.
Knowing much more is likely to remain elusive.
According to a controversial settlement agreement the Justice Department signed in May, the IRS and the Treasury Department are "FOREVER BARRED and PRECLUDED" from pursuing claims against Mr. Trump or his company, based on prior tax returns. The agreement settled a lawsuit by the president that accused the IRS of failing to protect his tax returns by allowing a government contractor to leak the documents to news outlets, including the New York Times, in 2020.
The settlement included a more than $1.7 billion "anti-weaponization" fund that would offer payments to people who alleged they were victims of government "lawfare." The fund outraged Democrats and Republicans alike, and its creation was paused by a federal judge. Acting Attorney General Todd Blanche subsequently told Congress the Justice Department was "not moving forward with the fund."
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