CLARITY Act Ethics Provision Could Allow Trump to Defer Taxes on Crypto Holdings, Bloomberg Reports

Aug 6, 2026

A bipartisan ethics proposal in the CLARITY Act, introduced by Senators Thom Tillis and Ruben Gallego, seeks to resolve conflicts of interest by requiring President Donald Trump to divest his cryptocurrency holdings. However, the forced sale could trigger federal tax-deferral mechanisms, potentially allowing Trump to defer or entirely avoid millions of dollars in capital gains taxes. Financial disclosures show Trump earned $1.4 billion from crypto ventures in 2025, including $635 million from memecoin royalties and $588 million from World Liberty Financial.

CLARITY Act ethics provision

▪The proposed CLARITY Act ethics provision would grant state attorneys general the authority to enforce compliance, which has drawn criticism from some Republicans.
▪The proposed ethics provision in the CLARITY Act was introduced by Republican Senator Thom Tillis and Democratic Senator Ruben Gallego as a compromise to advance the bill.
▪A bipartisan ethics proposal pitched to US President Donald Trump to secure passage of the CLARITY Act could allow him to defer capital gains taxes on required crypto divestitures.

Trump cryptocurrency divestiture requirements

▪The White House and lawmakers are negotiating the final language, eligibility rules, and tax treatment of the CLARITY Act ethics addendum, which has not been released publicly.
▪The proposed ethics addendum to the CLARITY Act includes a provision requiring President Donald Trump to divest from his cryptocurrency-related business interests.

Capital gains tax deferral

▪If Donald Trump's crypto assets are held until death under the tax-deferral mechanism, the capital gains tax liability could be eliminated entirely due to a step-up in basis.
▪Donald Trump's cryptocurrency holdings have grown to an estimated $1.456 billion, representing approximately $88 million in profit.
▪Under U.S. tax law, forced divestitures under the ethics provision could allow Donald Trump to defer capital gains taxes indefinitely by reinvesting proceeds in similar assets.

Congressional conflict of interest concerns

▪The CLARITY Act (H.R. 3633) was missing from the August 3 Senate schedule, signaling that the bill is not an immediate legislative priority.
▪Democratic concerns over Donald Trump's cryptocurrency conflicts of interest have served as a central obstacle to passing the market-structure bill in the Senate.

Trump crypto income disclosure

▪The Trump family's DeFi platform, World Liberty Financial, generated approximately $588 million from token sales, with Trump-affiliated DT Marks DEFI LLC owning about 38% of the parent company.
▪Donald Trump received approximately $635 million in royalties from a licensing agreement with Celebration Coins for memecoins like Official Trump (TRUMP).
▪Donald Trump's 2025 annual financial disclosure report revealed he received $1.4 billion in income from cryptocurrency-related ventures last year.