Strategy: The 2025 preferred stock dividend distribution will be treated as a tax-exempt capital return.

Bitcoin treasury company Strategy announced that, in accordance with U.S. federal income tax regulations, all dividend payments from its preferred stock in 2025 will be treated as tax-exempt returns of capital (ROC) within the shareholder's tax base. This information has been disclosed through Form 8937. The payments will be considered capital returns and will correspondingly reduce the shareholder's tax base in the relevant preferred stock instrument. Any amount exceeding the tax base will be treated as capital gains. Strategy added that it has raised approximately $5.5 billion through five perpetual preferred stock offerings in 2025, followed by an additional $1.9 billion through its ATM program, bringing the total raised to approximately $7.4 billion. To date, the company has paid out approximately $413 million in dividends, corresponding to a weighted annualized dividend yield of approximately 9.6%. Strategy anticipates that there is currently no accumulated earnings (E&P) under US tax law. Therefore, it expects preferred stock distributions to likely maintain the ROC tax treatment for a considerable period (potentially over 10 years). However, the final tax outcome may still be adjusted based on changes in the company's financial situation. Strategy also cautions that different investors may experience varying tax scenarios. (Businesswire)