MicroStrategy Faces Potential Massive Tax on Unrealized $19B Bitcoin Gains

Last Updated on January 24, 2025

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MicroStrategy logo displayed on a modern smartphone green rising chart in the background. Source: keBu.Medien - stock.adobe.com

Key Takeaways:

  • MicroStrategy’s Bitcoin Gains & Tax Implications: MicroStrategy’s unrealized Bitcoin gains exceed $19.3 billion but may face a 15% tax under the corporate alternative minimum tax (CAMT), per the Inflation Reduction Act of 2022.
  • Pushback from Crypto Firms: MicroStrategy and Coinbase have jointly urged the IRS to exempt unrealized crypto gains from CAMT, citing unintended consequences for crypto-holding corporations.
  • Evolving US Crypto Tax Landscape: Starting in 2025, US crypto exchanges must report digital asset transactions, with increasing regulatory scrutiny on crypto tax compliance.

MicroStrategy, the largest corporate Bitcoin holder, may face federal income taxes on $19.3 billion in unrealized Bitcoin gains under the 2022 Inflation Reduction Act.

The act introduced a 15% corporate alternative minimum tax (CAMT) on companies with an average annual adjusted financial statement income exceeding $1 billion, potentially impacting corporations with significant crypto holdings.

Despite never selling any Bitcoin, MicroStrategy’s portfolio of over 450,000 BTC, worth more than $48 billion, may fall under these new tax rules.

MicroStrategy and Coinbase have jointly opposed the regulation, urging the IRS to exclude unrealized crypto gains from taxable income to avoid “unjust and unintended consequences.”

This issue arises after MicroStrategy settled a $40 million tax fraud lawsuit in 2024, following allegations that its co-founder, Michael Saylor, evaded income taxes for over a decade.

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