SouthernWorldwide.com – President Trump’s recent financial disclosure has shed light on his cryptocurrency ventures, revealing a substantial $1.4 billion in income. This revelation has sparked renewed interest in his tax obligations, with experts estimating that the taxes on this income could amount to hundreds of millions of dollars.
One accountant specializing in cryptocurrency stated that it’s reasonable to assume Mr. Trump would owe at least $250 million on this income. However, multiple tax experts have indicated to CBS News that the actual tax bill might be considerably lower, largely due to the lack of transparency surrounding the corporate entities that hold this income.
Unlike several previous presidents, Mr. Trump has not made his tax returns public. This lack of transparency makes it challenging to ascertain the exact tax implications of his crypto earnings.
“What we know is that he did very well for himself, but we don’t know how the beneficial ownership is structured,” explained 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 has declined to comment on any taxes Mr. Trump paid on his crypto income, whether it was taxed at an individual or business level, or if any operating losses were applied to his crypto-related tax bill.
If the entire $1.4 billion were subject to the federal individual income tax rate, Mr. Trump could owe the IRS approximately $518 million, based on the top statutory rate of 37%, before considering any potential deductions.
According to the IRS, digital assets are treated the same as traditional securities for capital gains tax purposes. However, Marian pointed out that the limited descriptions of the income sources in his financial disclosure make it difficult to determine if the income should be classified as capital gains or ordinary income.
For instance, the $625 million Mr. Trump earned from his $TRUMP meme coin is categorized as a royalty from a licensing agreement with a company named Celebration Coins. His financial disclosure also indicates that World Liberty Financial, the crypto company he co-founded with his sons, paid him over $590 million from the sales of digital tokens and equity in the business.
Furthermore, there is the question of whether the income is directly paid to Mr. Trump or to a business associated with him. If it’s the latter, it would be subject to a lower corporate tax rate. In either case, Mr. Trump could potentially 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 stated.
Obtaining more information is likely to be a difficult task.
A controversial settlement agreement signed by the Justice Department in May stipulates that 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. This agreement resolved a lawsuit filed by the president, who accused the IRS of failing to protect his tax returns by allowing a government contractor to leak the documents to news organizations, including The New York Times, in 2020.
The settlement included a more than $1.7 billion “anti-weaponization” fund intended to compensate individuals who claimed to be victims of government “lawfare.” This fund drew criticism from both Democrats and Republicans, and its implementation was temporarily halted by a federal judge. Acting Attorney General Todd Blanche later informed Congress that the Justice Department was “not moving forward with the fund.”
