47 Billion Dollar Bitcoin Load: MicroStrategy Faces Tax Issue! - Coin Bulletin

MicroStrategy is known for its $47 billion worth of Bitcoin reserves built up over the years through stock and debt offerings.

However, the Inflation Reduction Act ( that came into effect in 2022 reveals that the company may still be required to pay federal income tax even if it does not generate income from these Bitcoin assets.

The new law introduces a regulation known as “corporate alternative minimum tax” )CAMT(. This regulation anticipates a 15% tax payment for companies with annual financial statement income exceeding 1 billion dollars. This income is calculated according to the Generally Accepted Accounting Principles )GAAP(. According to the Wall Street Journal report, stock gains are exempt from tax under CAMT, while crypto assets do not benefit from this exemption.

This situation could put companies like MicroStrategy, which hold a large amount of Bitcoin, in a difficult position. The company's Bitcoin reserves, which include $18 billion in unrealized gains, could be subject to taxation even if they are not sold. MicroStrategy has started lobbying efforts to prevent this and hopes that the crypto-friendly policies of the Trump administration could solve this problem. However, if unsuccessful, they may have to sell Bitcoin to pay the tax bill. This could seriously undermine the company's Bitcoin-focused strategy as they do not have other profitable business areas.

According to MicroStrategy's latest statements, this regulation could leave the company facing billions of dollars in tax burdens next year. If a Bitcoin sale occurs, this situation could create significant pressure on the market and also affect other major institutional investors.