Melker Bengtsson
TL;DR
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Trump administration is looking at indexing capital gains to inflation, increasing the cost basis for all crypto holders
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Taxation changes usually need Congress; the White House has considered telling the Treasury to reconsider "cost" instead
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There's no bill, no executive order, and support is unclear even within the Republican party
President Donald Trump wants to change how the capital gains tax is calculated. Kevin Hassett, director of the White House National Economic Council, said in a Fox Business interview yesterday that the administration is looking at indexing capital gains to inflation.
Since digital assets are considered property, this would affect all crypto holders. Unless there’s ever deflation in the US economy, this would increase the cost basis.
How inflation indexing would work
Today, if you were to buy BTC for $100,000 and sell at $200,000, you’d be taxed for the $100,000 gain. But, with inflation indexing, your cost basis would move with inflation. So say, during the time you held your assets, inflation was a total of 20%, your cost basis would be $120,000, and you’d only be taxed on $80,000 of gains
Another idea that was floated with regards to capital gains tax is increasing the exemption for home sales. Today, the US has a $500,000 exemption for married couples.
Meanwhile, the crypto tax bill that Senator Cynthia Lummis introduced in June of 2025 has been stuck in the Senate Finance Committee without a vote for over a year. That bill would introduce a “de minimis” exemption, meaning transactions under $300 would be exempt from taxation. Indexing the cost basis would have a much larger impact on crypto holders. So while the dedicated crypto tax push has stalled, this would still benefit crypto holders.
Bypassing Congress through the Treasury
Usually, taxation changes need to go through Congress and nothing is going to pass there before midterms. The White House, therefore, has considered telling the Treasury to reconsider “cost” in this instance to include inflation.
This would be one of the largest tax cuts of the Trump presidency. The Committee for a Responsible Federal Budget has estimated the revenue cut to be $170 to $950 billion, through 2035, depending on its retroactivity.
Democrats are opposed to the suggestion saying it is a tax cut that has an outsized effect on the wealthiest. Republican support is not universal.
If enacted, this would be one of the largest tax cuts ever offered to US crypto investors. At this point though, there’s no bill, no executive order and support of the idea is unclear, even within the Republican party.
