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Strategy estimates $4.1 billion income tax benefit after Bitcoin gains

Strategy estimated the benefit in an Oct. 5 filing, citing a lower estimated tax expense tied to reversing a deferred tax asset and releasing a valuation allowance.

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Strategy estimated an income tax benefit of $4.1 billion after Bitcoin’s fair value rose above its cost as of Sept. 30, according to its Oct. 5 filing, published by CryptoSlate.

The company said the benefit would come from a lower estimated tax expense driven by an accounting adjustment, including reversing a deferred tax asset related to its Bitcoin and releasing the associated valuation allowance.

Strategy also disclosed that it held 848,000 BTC at an average purchase price of $75,440.70, including fees and expenses, as of Oct. 4 at 4 p.m. Eastern time.

The filing notes that the management-prepared figures were not audited or reviewed by KPMG, and CryptoSlate reported that the company’s accounting consequences can vary depending on what position is being measured.

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