MicroStrategy, the largest corporate Bitcoin holder, could face taxes on unrealized profits due to the Inflation Reduction Act of 2022.
CAMT and Its Impact
The Inflation Reduction Act of 2022 includes a Corporate Alternative Minimum Tax (CAMT) provision that imposes a 15% tax on certain corporations' earnings, including unrealized gains such as Bitcoin.
MicroStrategy's Tax Issues
MicroStrategy holds over 450,000 BTC, worth over $48 billion, with $19.3 billion in unrealized gains. The company has previously faced tax issues, settling a $40 million tax fraud lawsuit in June 2024.
Focus on Crypto Taxation
MicroStrategy and Coinbase have criticized the CAMT framework, arguing that taxing unrealized gains could have unintended consequences for companies holding cryptocurrencies. The IRS has focused on tightening regulations, introducing new reporting requirements effective 2025.
The new tax regulations raise concerns for companies with substantial crypto holdings, potentially influencing their strategy regarding digital assets.
