The Treasury Department is preparing to formally exempt crypto holdings from the Corporate Alternative Minimum Tax (CAMT), which would eliminate a potential multibillion-dollar tax liability for companies like Strategy that hold substantial Bitcoin reserves.
According to Eleanor Terret, the move addresses the 15% minimum tax on large corporations’ financial statement income that would have forced companies to pay taxes on unrealized digital asset gains under accounting rules requiring mark-to-market valuations.
Strategy currently holds approximately 640,031 Bitcoin, worth over $74 billion, with unrealized gains of over $27 billion, facing potential federal tax liabilities estimated in the billions starting in 2026 under the Biden-era Inflation Reduction Act provision.
Source: Saylor TrackerThe Corporate Alternative Minimum Tax applies to corporations earning over $1 billion annually, based on adjusted financial statement income, which includes fair value measurements of assets, such as Bitcoin, even when unsold.
The exemption follows sustained pushback from Strategy and Coinbase, which sent a joint letter to Treasury in May urging exclusion of unrealized crypto gains.
The companies argued that taxing paper profits creates unfair treatment compared to traditional stocks and bonds, could force asset sales just to pay taxes, disadvantages U.S. firms versus foreign competitors not subject to similar accounting rules, and raises constitutional concerns over taxing income that doesn’t exist.
Senate Hearing and Notice 2025-49 Formalize Regulatory Relief
The Treasury issued Notice 2025-49 on September 29, providing interim guidance on CAMT application and announcing its intent to issue revised proposed regulations incorporating new rules.
The notice introduces an “FVI Exclusion Option,” allowing corporations to disregard fair value measurement adjustments for items such as digital assets that are marked-to-market for financial statements but not for regular tax purposes.
The guidance also provides a “Hedge Coordination Option” for certain hedging transactions where both the hedge and hedged item are marked-to-market for tax but not for financial statement purposes.
These adjustments address distortions from including unrealized gains and losses in adjusted financial statement income calculations.
The Senate Finance Committee is expected to convene a hearing titled “Examining the Taxation of Digital Assets” on October 1, featuring Coinbase Vice President of Tax Lawrence Zlatkin alongside Coin Center policy director Jason Somensatto and tax experts.
The session examined how existing tax rules for securities and commodities should apply to digital assets.
Senators Cynthia Lummis and Bernie Moreno had previously urged Treasury Secretary Scott Bessent to address what they called an “unintended tax burden” on digital asset companies.
The lawmakers argued that CAMT could harm U.S. competitiveness by forcing American firms to sell tokens to cover tax liabilities while foreign rivals face no such constraint.
The issue stems from Financial Accounting Standards Board rules adopted after CAMT enactment that require companies to use fair value accounting for certain crypto assets.
Since CAMT calculates tax liability based on companies’ financial statement income, the combination creates current taxation on unrealized appreciation even when no income exists under standard tax rules.
Constitutional Concerns and Industry Coordination Drive Policy Shift
Strategy and Coinbase raised substantial constitutional concerns in their May 30 submission to the Internal Revenue Service, arguing that taxing unrealized gains through CAMT conflicts with the Sixteenth Amendment’s income tax framework.
The companies noted additional issues under the private non-delegation doctrine, as the tax results from decisions made by FASB, a private organization focused on accounting standards rather than tax principles.
The exemption maintains tax parity between domestic and foreign corporations, as international financial reporting standards do not require mark-to-market accounting for crypto assets.
This addresses the competitive disadvantages faced by U.S.-based companies subject to Generally Accepted Accounting Principles.
Treasury’s revised applicability rules allow taxpayers to rely on any single section of proposed CAMT regulations without adopting all provisions, or to follow interim guidance in recent notices without following any proposed rules.
No section of proposed or forthcoming regulations will apply to any taxable year beginning before corresponding final regulations are published in the Federal Register.
The exemption aligns with Executive Order 14178 on “Strengthening American Leadership in Digital Financial Technology,” which aims to promote U.S. leadership in digital assets while protecting economic liberty.
The guidance also supports Executive Order 14219‘s directive to identify regulations that harm national interests by impeding technological innovation.
Currently, companies like Strategy face January 2026 as the initial deadline for potential CAMT liabilities if exemptions are not granted.
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