Tesla, the electric vehicle maker, saw its actual Bitcoin (BTC) losses drop far lower, with $64 million worth of previously realized profits used to offset the drop.
Based on Tesla’s latest Q3 earnings report filed with the US Securities and Exchange Commission, the electric vehicle (EV) manufacturer confirmed that it has invested up to $1.5 billion in Bitcoin (BTC) since early 2021. Of that amount, the company is now sitting at $170 million of unrealized loss from the change in the fair value of its initial investment.
That amount is offset by a gain of $64 million from realized profits on Bitcoin at different points in the past two years, resulting in a net loss of $106 million by the end of Q3.
Tesla’s losses did not materially impact its integral operations, the filing said. Year-over-year, the EV manufacturer’s profits grew 169% from $3.3 billion in the first three quarters of 2021. Nonetheless, Tesla says that it is just holding about $218 million worth of Bitcoin on its balance sheet.
Based on the accounting rules, digital assets are considered indefinite-lived intangible assets. In that context, any drop in their fair values will need Tesla to recognize impairment charges, whereas the company does not make upside revisions for any price increases until a sale.
In such incredible and advantageous tax treatment, losses can be deducted against profits to minimize tax liabilities, while capital gains are not taxed until the time of the sale.
Buy Bitcoin NowTesla CEO Elon Musk is renowned in the Crypto industry for his support of digital assets, an affinity for memecoins, including Dogecoin (DOGE), and his $44-billion ambition to take over the social media platform Twitter.
Throughout the current acquisition, the billionaire tech investor has promised to get rid of the spam and scam bots from the platform, saying:
“They make the product much worse. If I had a Dogecoin for every crypto scam I saw, we’d have 100 billion Dogecoin.”
