Strategy Inc. announced that 100% of distributions paid on its preferred equity instruments during the 2025 calendar year are classified as a nontaxable return of capital (ROC) for U.S. federal income tax purposes. The company expects this treatment to continue for the foreseeable future, potentially ten years or more, as it does not anticipate generating current or accumulated earnings and profits.

Key Details

  • Tax Treatment: All distributions paid in 2025 on the company's preferred stock (STRF, STRC, STRK, STRD) qualify as a 100% return of capital, reducing a shareholder's tax basis rather than being taxed as ordinary income.
  • Capital Raised & Distributions: In 2025, Strategy raised $5.5 billion from initial public offerings of its preferred equity and an additional $1.9 billion via at-the-market programs. The company has paid $413 million in cumulative distributions to date.
  • Future Outlook: Management expects distributions to continue being treated as a return of capital for the foreseeable future (defined as ten years or more), based on its expectation of not generating taxable earnings and profits.