IRS Guidance Exempts C Corporations from Unrealized Crypto Gains Tax
The IRS issued interim guidance relieving certain tax burdens on companies holding cryptocurrencies and other assets. This affects:
- C Corporations with over $1 billion in revenue, exempting them from taxes on unrealized capital gains under the Corporate Alternative Minimum Tax.
- Firms like Strategy (MSTR) and Mara Holdings (MARA) benefit due to their substantial Bitcoin holdings.
Key Insights:
- This applies primarily to larger corporations, including Digital Asset Treasury companies.
- The guidance helps firms avoid liquidating assets to pay taxes, as crypto assets are volatile.
- The corporate alternative minimum tax regime imposes a minimum tax on large corporations, impacting treasury asset values.
- The guidance isn't limited to crypto; it affects any company with annual revenue around $1 billion, including most of the S&P 500.
- This interim guidance is applicable for next year's tax filings and signals potential permanent changes.
- Companies have until April, possibly extending to October, to file taxes under this guidance.