U.S. President Donald Trump is weighing a push to reduce capital gains taxes, a move that could allow investors — including cryptocurrency holders — to keep more of their profits when selling
U.S. President Donald Trump is weighing a push to reduce capital gains taxes, a move that could allow investors — including cryptocurrency holders — to keep more of their profits when selling appreciated assets.
Trump is considering calling on Congress to index capital gains to inflation and expand tax exemptions for some home sales ahead of November’s midterm elections, Bloomberg reported on Wednesday.
Former National Economic Council Director Larry Kudlow, now a Fox Business host, said he recently discussed indexing capital gains with Trump, while current NEC Director Kevin Hassett said the president was looking at additional policies to put before voters. Hassett discussed the idea on the Aug. 11 episode of Kudlow's Fox Business program.
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"I spoke to him, he liked the idea of the indexing, he liked the idea of a bigger exemption," Kudlow said, according to Bloomberg. Kudlow said Trump was "very interested" in both indexing and in raising the exemption on home sales — reportedly exempting sales of homes worth $2 million or less from capital gains taxes, well above the current exclusion of $250,000 for single filers and $500,000 for married couples.
No proposal has been formally announced, and most changes to federal tax law would require congressional approval. The White House told Bloomberg that Trump is exploring ideas but that policy announcements would come directly from the administration.
Capital gains taxes apply to profits investors realize when they sell assets for more than they paid.
For example, an investor who buys an asset and later sells it for a $10,000 profit generally owes tax on that gain. A lower effective capital gains tax means a smaller portion goes to the government and more stays with the investor.
The rules cover investments including stocks and real estate, but they also matter for crypto.
The Internal Revenue Service treats digital assets as property, with Bitcoin (BTC) specifically listed among its examples. Digital assets held for investment are generally subject to capital gains or losses when sold or disposed of.
That means a broad reduction in capital gains taxation could also benefit investors realizing profits from Bitcoin, Ether (ETH) and other cryptocurrencies, unless legislation carved digital assets out of the change.
Indexing differs from simply cutting the headline tax rate. Instead, an investor's original purchase price would effectively be adjusted for inflation, reducing the portion of an apparent gain that is taxable.
What investors save, however, could translate into less tax revenue for Washington.
The IRS does not publish a standalone figure showing how much federal revenue it collects specifically from cryptocurrency capital gains, making the exact fiscal impact of a crypto-related reduction difficult to calculate.
One outside estimate illustrates the potential scale.
Coincub's 2024 Crypto Tax Report estimated that the United States could generate about $1.87 billion in tax revenue from $9.36 billion in cryptocurrency gains.
The figure is an estimate, not reported IRS revenue, and was calculated using estimated gains and average tax rates.
Any actual reduction in federal revenue would depend on the structure of a final proposal, which assets and taxpayers qualify, investor behavior and whether Congress ultimately passes the changes.
Disclaimer: This article is for informational purposes only and is not tax, legal or investment advice. The tax changes described are reported proposals under consideration; no legislation or formal White House proposal has been announced, and any change would generally require congressional approval. Revenue figures cited are third-party estimates, not official government data.
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