Table content
# Fresh Directives Increase Tesla’s Bitcoin Earnings by $600 Million, Though MicroStrategy Might Surrender Billions
### Principal Conclusions
* Earlier this week, Tesla disclosed a $600 million gain from its Bitcoin assets, which made up more than a quarter of its Q4 revenues.
* Because of modifications to the Financial Accounting Standards Board’s (FASB) regulations on crypto assets, the business was able to incorporate these Bitcoin-related profits into its financial statements.
* Due to the same modifications to accounting regulations, MicroStrategy may be subject to billions of dollars in taxes.
Tesla (TSLA) may have made $600 million in profits from its Bitcoin (BTCUSD) holdings because of recent changes to accounting regulations, but those same regulations may cause MicroStrategy (MSTR) to incur billions of dollars in tax obligations.
About 26% of Tesla’s net profit for the fourth quarter of 2024 came from its Bitcoin holdings. The Financial Accounting Standards Board (FASB) standards were changed, allowing the business to record these Bitcoin-related profits.
## Impact of Revised Regulations on Businesses Possessing Bitcoin
Companies that possess Bitcoin are now permitted under the new rule, or ASU 2023-08, to account for its value at fair market value, or according to its market trading price.
Paul Miller, Managing Partner and CPA at Miller & Company LLP, told *Investopedia* that the primary benefit of the new fair market value rule for corporate digital asset holdings is that it will enable businesses to display the value of their digital assets instantly.
Bitcoin was previously regarded as an “indefinite-lived intangible asset” under FASB guidance, which compelled businesses to write down its Toncoin (TON) Value Forecast for March 26th when prices declined but forbade them from recording gains unless the asset was sold.
The prior setup annoyed MicroStrategy’s creator, Michael Saylor, who felt it impeded embracing Bitcoin as a business monetary resource.
## Why MicroStrategy Could Encounter a Massive Levy
Bitcoin acted incredibly well in the past year and has stayed vigorous up to this point this year. The Wall Street Journal as of late detailed that MicroStrategy’s significant Bitcoin buys have brought about roughly $18 billion in theoretical Bitcoin benefits under the new guidelines. This could prompt a duty bill of billions of dollars for MicroStrategy.
This rearrangement of crypto resources on its books implies MicroStrategy could be dependent upon a 15% assessment on theoretical Bitcoin benefits under the Corporate Alternative Minimum Tax (CAMT) of the Inflation Reduction Act. This suggests that the organization might confront charges on these additions beginning in 2026, even without selling a solitary coin—a gamble the organization recognized in late administrative filings.
MicroStrategy expressed that because of the institution of the IRA and its reception of ASU 2023-08 on January 1, 2025, it very well may be dependent upon the corporate elective least assessment in the assessment years of 2026 and then some except if the proposed guidelines for CAMT are revised to give help.
While MicroStrategy stays one of the biggest corporate Bitcoin holders, other openly exchanged organizations, like Marathon Digital (MARA), Riot Platforms (RIOT), and Semler Scientific (SMLR), are following its Bitcoin buying methodology and might be impacted by this standard change.
