Company: MSTR
Filing Date: 2025-01-03
Form Type: DEF 14A
Source: 0001140361-25-000231
Chunk: 159

Company: Strategy Inc
Filing Date: 2025-01-03
Form: DEF 14A
Chunk 159
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 built-in gain for tax purposes and is therefore a source of future taxable income that is expected to allow all of the U.S. net deferred tax assets to be realized. As part of the assessment of the amount of the valuation allowance, management has asserted that it has the ability and intent to execute tax planning strategies if necessary, including selling bitcoin with a built-in gain. After consideration of all available evidence, the Company has concluded that, as of December 31, 2023, it is more likely than not that its deferred tax assets, with the exception of certain foreign tax credits for which a valuation allowance has been established, will be realized. If the market value of bitcoin declines in future periods, the Company would need to assess other sources of forecasted taxable income of proper character, which could result in additional valuation allowances being recorded. As of December 31, 2023 and 2022, the Company had income taxes receivable of $15.3 million and $2.5 million, respectively, recorded in “Prepaid expenses and other current assets” in the Company’s Consolidated Balance Sheets. As of December 31, 2023, the Company had gross unrecognized income tax benefits of $8.3 million, including accrued interest, all of which was recorded in “Other long-term liabilities” in the Company’s Consolidated Balance Sheets. The change in unrecognized income tax benefits (in thousands) is presented in the table below for the periods indicated:

|                                                                |     |   2023 |     |   2022 |     |   2021 |
| Unrecognized income tax benefits at beginning of year          |     | $5,811 |     | $5,960 |     | $4,293 |
| Increase (decrease) related to positions taken in prior period |     |  1,458 |     |    -67 |     |  1,082 |
| Increase related to positions taken in current period          |     |    930 |     |    318 |     |  1,146 |
| Decrease related to settlement with tax authorities            |     |      0 |     |    -40 |     |      0 |
| Decrease related to expiration of statute of limitations       |     |   -301 |     |   -360 |     |   -561 |
| Unrecognized income tax benefits at end of year                |     |  7,898 |     |  5,811 |     |  5