WSJ: Microstrategy may face huge tax obligations due to CAMT tax law and is seeking exemption

Odaily Planet Daily News This week, the Wall Street Journal highlighted the tax issues that the public company Microstrategy may face, especially the issue of unrealized gains. Microstrategy, which reportedly owns 461,000 BTC, may face huge tax liabilities unless the current rules are amended. The title of the article suggests that the company may need "help from the Trump IRS." The problem stems from the tax provisions introduced under the Corporate Alternative Minimum Tax (CAMT), a product of Biden's 2022 Comprehensive Inflation Reduction Act. The regulation stipulates that companies with adjusted financial statement income (AFSI) exceeding $1 billion in three years are subject to a 15% minimum tax on these incomes. So far, Trump has been making big cuts, layoffs, and firing specific government officials, and he has also lost no time in canceling some of Biden's executive orders. Microstrategy has been working hard to resolve this issue in order to obtain an exemption. If the exemption is not granted, some people believe that Microstrategy may need to liquidate some of its Bitcoin holdings to meet tax obligations, which could undermine the broader cryptocurrency market. Others believe this is unwarranted speculation and FUD. Whether the company is being helped by Trump remains to be seen, but from a free market perspective, the idea of ​​taxing unrealized gains, whether for Microstrategy or any other company, as CAMT points out, is morally indefensible and economically destructive. In addition, the analysis points out that by targeting unrealized gains, CAMT embodies a classic example of government overreach that undermines property rights and market stability. Forcing a company to sell its Bitcoin holdings to meet arbitrary tax obligations seems likely to destabilize the broader cryptocurrency market, but more fundamentally, it infringes on a company's right to freely manage its resources.