How large can your farm be before needing to register a company

[KaydenC]

In most of the world, mining isn't taxable. Do you guys register a company anyways to mine even if it isn't required, just to be safe?

I was thinking of registering as a company, being a datacenter to sell hosting services to clients (One client, myself).

[Za1n]

In most of the world, mining isn't taxable. Do you guys register a company anyways to mine even if it isn't required, just to be safe?

I was thinking of registering as a company, being a datacenter to sell hosting services to clients (One client, myself).

In the US you could register as a sole proprietor with one miner, or none actually, if you wanted to as there are no specific requirements to register a company.

The main reasons to register your mining operation under a company name is due to tax issues and/or liability reasons. Since you are planning to only self mine, liability probably isn't much of an issue unless you plan to sue yourself (is that even possible?), so it comes down to taxes.

I am not a lawyer or accountant, but I believe the IRS treats taxes for sole-proprietary's and LLC (Limited Liability Companies) much the same as it does individual taxes. Short of getting together with other people to form a partnership or an actual corporation it is hard to get around the tax issue if you are the sole owner/employee. Anyway, there are good reasons to form a company, but you haven't really given any reasons yet as to why you would need to. Your statement "just to be safe" doesn't seem like a reason, and further, safe from what?

[KaydenC]

In most of the world, mining isn't taxable. Do you guys register a company anyways to mine even if it isn't required, just to be safe?

I was thinking of registering as a company, being a datacenter to sell hosting services to clients (One client, myself).

In the US you could register as a sole proprietor with one miner, or none actually, if you wanted to as there are no specific requirements to register a company.

The main reasons to register your mining operation under a company name is due to tax issues and/or liability reasons. Since you are planning to only self mine, liability probably isn't much of an issue unless you plan to sue yourself (is that even possible?), so it comes down to taxes.

I am not a lawyer or accountant, but I believe the IRS treats taxes for sole-proprietary's and LLC (Limited Liability Companies) much the same as it does individual taxes. Short of getting together with other people to form a partnership or an actual corporation it is hard to get around the tax issue if you are the sole owner/employee. Anyway, there are good reasons to form a company, but you haven't really given any reasons yet as to why you would need to. Your statement "just to be safe" doesn't seem like a reason, and further, safe from what?

To be safe from government officials knocking on my door, asking about my electricity bill, demanding proof of business license. If that ever happens, I'm not sure how mining crypto can be explained to them. They cannot order a miner to shut down its operations right?

I mine in Malaysia and crypto mining is not taxable here.

[dbc23]

In most of the world, mining isn't taxable. Do you guys register a company anyways to mine even if it isn't required, just to be safe?

I was thinking of registering as a company, being a datacenter to sell hosting services to clients (One client, myself).

In the US you could register as a sole proprietor with one miner, or none actually, if you wanted to as there are no specific requirements to register a company.

The main reasons to register your mining operation under a company name is due to tax issues and/or liability reasons. Since you are planning to only self mine, liability probably isn't much of an issue unless you plan to sue yourself (is that even possible?), so it comes down to taxes.

I am not a lawyer or accountant, but I believe the IRS treats taxes for sole-proprietary's and LLC (Limited Liability Companies) much the same as it does individual taxes. Short of getting together with other people to form a partnership or an actual corporation it is hard to get around the tax issue if you are the sole owner/employee. Anyway, there are good reasons to form a company, but you haven't really given any reasons yet as to why you would need to. Your statement "just to be safe" doesn't seem like a reason, and further, safe from what?

To be safe from government officials knocking on my door, asking about my electricity bill, demanding proof of business license. If that ever happens, I'm not sure how mining crypto can be explained to them. They cannot order a miner to shut down its operations right?

I mine in Malaysia and crypto mining is not taxable here.

I'd think you'd need to either find a knowledgeable Malaysian miner or a professional (lawyer/accountant/etc...) who is familiar with Malaysian law to know for sure.  There's LOTS of nationalities on this board and the differences from one country to another can be substantial.  If I was you I wouldn't base your decision on how US/Chinese/Canadians/etc... do what they do.

[h311m4n]

In most of the world, mining isn't taxable. Do you guys register a company anyways to mine even if it isn't required, just to be safe?

I was thinking of registering as a company, being a datacenter to sell hosting services to clients (One client, myself).

I don't think you absolutely need to register as a company, even for a large farm. The only reason to, would be for taxes and other things. For instance, if you register a company, all your hardware can be justified as investments/charges you had to make in order to get your business running (much like you would need to buy desks, chairs, computers and whatever else for a company). This in turn would show as a deficit in your accounting, even if it isn't really. So you'd be making money by giving yourself a salary, the rest would go as payments for what you had to invest. So essentially, you're company is not making profit and if it's not making a profit, it can't really pay taxes. I'm no lawyer or accountant, but I was part of a small business once and I remember this is sort of how it works.

Other than that, it's more a question of having a good insurance. I don't know where or how you mine, but if you do this in the basement of a house and it catches fire, hurting people in the process, you'd better be sure you don't have to cover the costs yourself.

The electricity bill justification can be important especially if you live somewhere where people get in a lot of trouble for cultivating weed which does require a lot of electricity as well.

[kilobytez]

well, you need a business license since your mining hardware consumes electricity otherwise the Malaysian government will definitely knock on your door due to unknown activities behind the wall. If mining in a remote place, I think you can skip the registration. I believe najib administration do not have any knowledge on crypto so 2-3 years time from now a business license can consider a waste of money since you gotta file your ledger / tax (at your own risk).

[crazyivan]

If it isnt taxable, why do you need a company? U want to get taxed?

[adaseb]

The OP is wrong. Mining is like a regular job which earns income and that's always taxable.

What county doesn't tax wages? None.

[phobosq]

I always thought that mining itself is not taxable, but buying/selling crypto is, especially when exchanging crypto<->fiat.

[Za1n]

In most of the world, mining isn't taxable. Do you guys register a company anyways to mine even if it isn't required, just to be safe?

I was thinking of registering as a company, being a datacenter to sell hosting services to clients (One client, myself).

In the US you could register as a sole proprietor with one miner, or none actually, if you wanted to as there are no specific requirements to register a company.

The main reasons to register your mining operation under a company name is due to tax issues and/or liability reasons. Since you are planning to only self mine, liability probably isn't much of an issue unless you plan to sue yourself (is that even possible?), so it comes down to taxes.

I am not a lawyer or accountant, but I believe the IRS treats taxes for sole-proprietary's and LLC (Limited Liability Companies) much the same as it does individual taxes. Short of getting together with other people to form a partnership or an actual corporation it is hard to get around the tax issue if you are the sole owner/employee. Anyway, there are good reasons to form a company, but you haven't really given any reasons yet as to why you would need to. Your statement "just to be safe" doesn't seem like a reason, and further, safe from what?

To be safe from government officials knocking on my door, asking about my electricity bill, demanding proof of business license. If that ever happens, I'm not sure how mining crypto can be explained to them. They cannot order a miner to shut down its operations right?

I mine in Malaysia and crypto mining is not taxable here.

Yeah, I am in the US and have thought about someone come knocking on my door too for the "excessive" electrical usage I have compared to my neighbors.

I don't think being registered as a business would make much difference in that regard since I have most of my miners at home. If it ever did happen, and they were somewhat cordial about it, I figure I would just explain what I am doing and maybe offer to have a small tour just to dispel any other notions they may have.

[KaydenC]

In most of the world, mining isn't taxable. Do you guys register a company anyways to mine even if it isn't required, just to be safe?

I was thinking of registering as a company, being a datacenter to sell hosting services to clients (One client, myself).

In the US you could register as a sole proprietor with one miner, or none actually, if you wanted to as there are no specific requirements to register a company.

The main reasons to register your mining operation under a company name is due to tax issues and/or liability reasons. Since you are planning to only self mine, liability probably isn't much of an issue unless you plan to sue yourself (is that even possible?), so it comes down to taxes.

I am not a lawyer or accountant, but I believe the IRS treats taxes for sole-proprietary's and LLC (Limited Liability Companies) much the same as it does individual taxes. Short of getting together with other people to form a partnership or an actual corporation it is hard to get around the tax issue if you are the sole owner/employee. Anyway, there are good reasons to form a company, but you haven't really given any reasons yet as to why you would need to. Your statement "just to be safe" doesn't seem like a reason, and further, safe from what?

To be safe from government officials knocking on my door, asking about my electricity bill, demanding proof of business license. If that ever happens, I'm not sure how mining crypto can be explained to them. They cannot order a miner to shut down its operations right?

I mine in Malaysia and crypto mining is not taxable here.

Yeah, I am in the US and have thought about someone come knocking on my door too for the "excessive" electrical usage I have compared to my neighbors.

I don't think being registered as a business would make much difference in that regard since I have most of my miners at home. If it ever did happen, and they were somewhat cordial about it, I figure I would just explain what I am doing and maybe offer to have a small tour just to dispel any other notions they may have.

Being registered as a business in my opinion will help. For example if the business owner of an industrial company that already uses 2MW puts in 300KW of mining gear in his location (Either his gear, or hosting for someone else), that won't be a problem.


But it is different if a warehouse uses 30KW and has no businesses operating in it. If a warehouse use 30KW, and there's a registered business such as a datacenter that will be fine. We can always set ourselves as a client of the datacenter business, paying just enough to offset costs/rent such that the business does not have profits/tax.

If we were to give a tour, and they ask how much money we make, that is still a difficult question to answer. I will consider the business license an insurance cost. Also if the place were to burn down, like another member said, the limited liability company, not us, will be liable for the damage.

[ccccccc7]

Pretty sure mining is taxable in most countries (when exchanged into FIAT at least, I have never heard of a government collecting crypto directly from someone who is holding that which they mined), however, most people just do not declare their earnings and tax authorities are fairly clueless about it.

In the UK at least Crypto profits fall under Capital Gains Liability which can be declared on a Tax Return as FOREX profits or something similar, so you wouldn't even specifically register a business unless it benefits you.

To be safe from government officials knocking on my door, asking about my electricity bill, demanding proof of business license. If that ever happens, I'm not sure how mining crypto can be explained to them. They cannot order a miner to shut down its operations right?

I am more worried about the Police bashing my door down thinking that I'm running a massive cannabis factory in my place, mining uses loads of power and gives off tons of heat and I always have my windows open wide all year round (I live high up) pretty much all the hallmarks of someone growing bud.

You can't just tell them it's a hobby of yours or that you are running an AI server or some other bullshit?

Being registered as a business in my opinion will help. For example if the business owner of an industrial company that already uses 2MW puts in 300KW of mining gear in his location (Either his gear, or hosting for someone else), that won't be a problem.
But it is different if a warehouse uses 30KW and has no businesses operating in it. If a warehouse use 30KW, and there's a registered business such as a datacenter that will be fine. We can always set ourselves as a client of the datacenter business, paying just enough to offset costs/rent such that the business does not have profits/tax.
If we were to give a tour, and they ask how much money we make, that is still a difficult question to answer. I will consider the business license an insurance cost. Also if the place were to burn down, like another member said, the limited liability company, not us, will be liable for the damage.

You didn't say how many GPU you are running? 30KW?

Sounds like you are starting a 100+GPU farm out there I would for sure register a Limited company and purchase some business insurance and probably a security guard and a Gaseous fire suppression system if you are playing with that kind of investment.

[newtybar]

If you are large enough and plan to be legit and pay taxes, it could be beneficial since you can depreciate the equipment.

[adaseb]

Mining profits are not considered capitals gains. They are just like any other jobs out there.

[Regulater]

If you are large enough and plan to be legit and pay taxes, it could be beneficial since you can depreciate the equipment.

This is legit the way to go. Depending on how you do it, you can get into the non-tax bracket if you set up your costs and expenses accordingly. You can deduct a percentage of your house/rental payment if you are operating it in your house depending on the square footage you are deducting. Then you deduct electricity costs, deduct depreciation on your equiptment. Deduct the cost of the computers, and any equipment you are using with it. For example, you are using a table/desk, you can deduct that cost plus a depreciation on that table/desk. Any coins or cryptocurrency that was not transferred to USD, does not need to be applied to your taxes either. In the end, you will be below the taxable bracket and will not have to pay taxes at all, and will have no worry about any issues.