Why A New Rule Helped Tesla Get $600M in Bitcoin Positive aspects However Might Value MicroStrategy Billions

A latest change to accounting guidelines could have helped ship a $600 million revenue on bitcoin (BTCUSD) holdings for Tesla (TSLA), however the identical rule might probably depart MicroStrategy (MSTR) with a multi-billion greenback tax invoice.

Roughly 26% of Tesla’s internet earnings for the fourth quarter of 2024 got here from its bitcoin holdings. The corporate was in a position to ebook these bitcoin-derived income as a result of a change in Monetary Accounting Requirements Board (FASB) tips for crypto belongings.

What The New Rule Means For Bitcoin-Proudly owning Firms

The brand new guidelines or ASU 2023-08 enable corporations with bitcoin holdings to account for its worth on a mark-to-market foundation or relying on the place it is buying and selling at within the markets.

“The first benefit of the FASB’s new guidelines regarding the new mark-to-market rule for company digital asset holdings are that it’s going to enable corporations to offer the worth of their digital belongings in actual time,” Miller & Firm LLP Managing Associate & CPA Paul Miller advised Investopedia.

Below earlier FASB tips, bitcoin was handled as an “indefinite-lived intangible asset,” forcing corporations to jot down down its worth when costs dropped however stopping them from recording beneficial properties until the asset was bought.

The previous system pissed off MicroStrategy’s founder, Michael Saylor, who argued it bought in the way in which of adoption of bitcoin as a company treasury asset.

Why MicroStrategy Might Land a Large Tax Invoice

Bitcoin’s been on a tear final yr and stays sturdy effectively into this yr. Based mostly on the brand new guidelines, MicroStrategy’s bitcoin shopping for spree has left it with roughly $18 billion in unrealized bitcoin beneficial properties, The Wall Avenue Journal reported just lately. That would create a tax invoice value billions for MicroStrategy.

This reclassification of crypto belongings on its books has made MicroStrategy probably susceptible to a 15% tax on unrealized bitcoin beneficial properties below the Inflation Discount Act’s Company Different Minimal Tax (CAMT). Which means the corporate might face taxes on these beneficial properties beginning 2026, even with out promoting a single coin—a danger it acknowledged in a latest regulatory submitting.

“On account of the enactment of the IRA and our adoption of ASU 2023-08 on January 1, 2025, until the proposed rules with respect to CAMT are revised to offer reduction, we might turn out to be topic to the company different minimal tax within the tax years 2026 and past,” MicroStrategy mentioned.

Though MicroStrategy stays one of many largest company bitcoin house owners, different listed corporations, akin to Marathon Digital (MARA), Riot Platforms (RIOT), Semler Scientific (SMLR), are following its bitcoin shopping for playbook and could possibly be affected by this rule change.