- The U.S. Treasury and IRS have clarified that companies can exclude unrealized crypto gains and losses when calculating adjusted financial statement income (AFSI) for tax purposes.
- Strategy (MSTR) announced it now expects to avoid the 15% Corporate Alternative Minimum Tax (CAMT) based on this new guidance.
- The clarification affects how corporations with large digital asset holdings, like Bitcoin, determine CAMT liability under the Inflation Reduction Act of 2022.
- The Treasury and IRS plan to release revised regulations in line with this interim policy.
- Shares of Strategy rose up to 6.5% following the announcement.
Strategy reported on Wednesday that it anticipates not being subject to the 15% Corporate Alternative Minimum Tax (CAMT) as a result of new guidance from U.S. federal authorities. The company cited an interim update from the Department of the Treasury and Internal Revenue Service, which allows firms to disregard unrealized gains and losses from digital assets, such as Bitcoin, when calculating their adjusted financial statement income (AFSI) for CAMT.
In its recent filing with the Securities and Exchange Commission (SEC), Strategy said these changes stem from an updated interpretation concerning the Inflation Reduction Act of 2022. This law originally required corporations with an average annual AFSI above $1 billion over a three-year period to pay a minimum 15% tax. Previously, proposed rules had included unrealized crypto gains in this calculation, which would have impacted companies holding significant amounts of digital assets.
The updated federal guidance states, “corporations may disregard unrealized gains and losses on digital asset holdings when calculating adjusted financial statement income (AFSI).” Strategy noted it now expects not to fall under CAMT rules, given its large, unrealized profit from Bitcoin holdings as of June. The company had previously warned that unrealized gains could make it subject to CAMT starting in 2026.
The Treasury and IRS plan to issue revised proposed regulations that match this interim guidance. This move reverses earlier draft rules from September 2024, which would have included unrealized digital asset gains in determining AFSI.
For more on this topic, refer to BTC, ETH, XRP Rally Fuels Gains In Strategy, Bitmine, And Crypto-Linked Stocks.
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