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

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

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

What The New Rule Means For Bitcoin-Proudly owning Firms

The brand new guidelines or ASU 2023-08 permit 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’ll permit corporations to offer the worth of their digital belongings in actual time,” Miller & Firm LLP Managing Associate & CPA Paul Miller informed Investopedia.

Underneath earlier FASB pointers, 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 positive aspects until the asset was bought.

The outdated system pissed off MicroStrategy’s founder, Michael Saylor, who argued it obtained in the way in which of adoption of bitcoin as a company treasury asset.

Why MicroStrategy Could Land a Big Tax Invoice

Bitcoin’s been on a tear final yr and stays robust properly 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 positive aspects, The Wall Road 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 weak to a 15% tax on unrealized bitcoin positive aspects beneath the Inflation Discount Act’s Company Different Minimal Tax (CAMT). Meaning the corporate may face taxes on these positive aspects beginning 2026, even with out promoting a single coin—a threat it acknowledged in a current regulatory submitting.

“Because of the enactment of the IRA and our adoption of ASU 2023-08 on January 1, 2025, until the proposed laws with respect to CAMT are revised to offer aid, we may turn into 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 homeowners, different listed corporations, comparable to Marathon Digital (MARA), Riot Platforms (RIOT), Semler Scientific (SMLR), are following its bitcoin shopping for playbook and might be affected by this rule change.