MSTR Stock Rallies After Strategy Says Bitcoin Gains Exempted From Corporate Minimum Tax

Shares of Michael Saylor-backed Strategy (MSTR) rose as much as 6.5% in midday trading on Wednesday after the company said it no longer expects to be subject to the Corporate Alternative Minimum Tax (CAMT) because of unrealized gains on its Bitcoin (BTC) holdings.

On Stocktwits, retail sentiment around MSTR’s stock trended higher in ‘bullish’ territory amid ‘high’ levels of chatter. The rally in the stock came alongside a recovery of nearly 4% in Bitcoin’s price over the last 24 hours. The apex cryptocurrency was trading at over $117,000 at the time of writing. 

In a filing with the Securities and Exchange Commission (SEC), Strategy cited interim guidance issued by the Department of the Treasury and the Internal Revenue Service. The guidance clarified that corporations may disregard unrealized gains and losses on digital asset holdings when calculating adjusted financial statement income (AFSI). 

This is relevant for determining whether they fall under the 15% corporate alternative minimum tax (CAMT) created by the Inflation Reduction Act of 2022. Strategy also noted that Treasury and the IRS intend to issue revised proposed regulations consistent with this interim guidance.

The clarification marks a shift from proposed regulations released in September 2024, which would have required corporations with an average annual AFSI above $1 billion over a three-year period to pay the minimum tax. Strategy previously warned that, given the magnitude of its unrealized Bitcoin gains in June, it expected to fall under CAMT beginning in 2026.

Strategy announced earlier this week that it had bought another 196 BTC, bringing its total holdings up to more than 640,000 Bitcoin. Its reserves currently have unrealized gains of nearly 60%, according to data from Bitcoin Treasuries.

“Looks like Strategy/MSTR will be eligible for S&P 500 index inclusion in December,” noted Bloomberg analyst James Seyffart in a post on X. Analysts estimate Strategy will post net income of $2.9 billion for the third quarter (Q3), with earnings of $10 per share, marking the second consecutive profitable quarter driven by its Bitcoin reserves. 

Read also: BTC, ETH, XRP Rally Fuels Gains In Strategy, Bitmine, And Crypto-Linked Stocks

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