MicroStrategy (MSTR), the corporate Bitcoin giant led by Michael Saylor, could face a surprising tax burden on its staggering $19.3 billion in unrealized Bitcoin gains. According to The Wall Street Journal, the Inflation Reduction Act of 2022 may subject MicroStrategy to a 15% corporate alternative minimum tax (CAMT) based on adjusted earnings. The unexpected twist? The company has never sold a single Bitcoin.
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Saylor’s Crypto Kingdom Faces Scrutiny
MicroStrategy’s Bitcoin portfolio, now surpassing 450,000 BTC valued at over $48 billion, was recently bolstered by a $243 million purchase. Yet the CAMT rule could force corporations with significant crypto holdings to pay taxes on gains they haven’t yet realized, according to Cointelegraph. MicroStrategy and Coinbase (COIN) have teamed up to challenge this, urging the U.S. Treasury and IRS to exempt crypto from CAMT. They argue the tax creates “unjust and unintended consequences.”
Trump Administration Could Rewrite Rules
With President Donald Trump’s pro-crypto administration in charge, there’s hope for a regulatory adjustment. A potential exemption for Bitcoin could shield firms like MicroStrategy from tax obligations on paper gains. However, until changes are formalized, the company may be navigating uncharted waters.
This tax dilemma shows us that there is a growing trend of crypto regulation in the U.S. Let’s imagine how this year may possibly go: 2025 could be filled with centralized crypto exchanges that report transactions to the IRS. Perhaps this is a move designed to enhance compliance, but it must be noticed that it is criticized as invasive. Decentralized platforms may become a haven for investors dodging scrutiny, which may further complicate tax collection efforts. The battle over crypto taxes is far from over.
As tax debates heat up over MicroStrategy’s $19 billion in unrealized Bitcoin gains and U.S. crypto regulations tighten, keeping up is key for investors trying to make sense of these changing tides. Investors can track their favorite cryptocurrencies on TipRanks. Click on the image below to find out more.
