Should I start a business to mine

[bughatti]

So I have been doing alot of research this weekend about the taxes involved in mining.  Something I dont see alot of in the forums!  Many websites and many opinions.  The only thing I can semi gather is that if I hold coins I am mining long term It could be 15% but if I sell as soon as I get a coin I am paying normal taxes for the bracket percent I am in.  I live in the US. 

To get max profits it almost makes sense to start a business just so I can write off power and equipment.

Not looking for legal advice just would like to know thoughts on this from anyone in the US.

[DebitMe]

So I have been doing alot of research this weekend about the taxes involved in mining.  Something I dont see alot of in the forums!  Many websites and many opinions.  The only thing I can semi gather is that if I hold coins I am mining long term It could be 15% but if I sell as soon as I get a coin I am paying normal taxes for the bracket percent I am in.  I live in the US. 

To get max profits it almost makes sense to start a business just so I can write off power and equipment.

Not looking for legal advice just would like to know thoughts on this from anyone in the US.

You can report your mining income on Schedule C and still deduct power and equipment costs.  You will have to report mining earnings as ordinary income then any fluctuation in bitcoin price can be capital gains/losses.  One you go to sell the equipment is a whole other bag of worms that requires a lot of careful planning.

[xxcsu]

https://bitcointalk.org/index.php?board=74.0

https://bitcointalk.org/index.php?topic=1724798.0

[Tmdz]

If you have a small setup, like a couple of rigs then you can report it as hobby income.

A business would mean it is being run like a business and the irs may ask for you to prove it. 

https://www.irs.gov/help-resources/tools-faqs/faqs-for-individuals/frequently-asked-tax-questions-answers/small-business-self-employed-other-business/income-expenses/income-expenses

You have to report the amount you earned by mining for the year.

When you sell you then inquire capital gain/loss from the time you acquired the coins to selling them.

Reporting as hobby income is what I do as it is a small setup.  I got to deduct my expenses as there is no point in paying 100% capital gains and besides they will want to know where coins came from if they ever happen to audit coinbase database.

[dagarair]

simple answer is yes if you want to be 100% legit.  Nothing illegal about mining other than if you decide to not pay taxes....

If its a miner or 2 then i would nto worry abut a business just add it as "extra" income.  If you are making a ton of $ a year then yes consult a tax dude.

[crazyivan]

Taxes on mining? Buaahhahahahahahahahhaha. 

[philipma1957]

Keep records. Decide in October .

If I recall you started in 2017.

So if you keep records and see you are doing well in October you can ask an accountant what to do.

[Ambros]

Taxes on mining? Buaahhahahahahahahahhaha. 

+1.. The best thing about crypto is that you do not have to pay any taxes..

[Bustart]

Taxes on mining? Buaahhahahahahahahahhaha. 

+1.. The best thing about crypto is that you do not have to pay any taxes..

When you spend the coins, tax man might ask.

[Ambros]

Taxes on mining? Buaahhahahahahahahahhaha. 

+1.. The best thing about crypto is that you do not have to pay any taxes..

When you spend the coins, tax man might ask.

Yeah, they could.
What I try to do is spend most of my coins directly. I buy online in shops that accept bitcoin, buy directly from people that accept bitcoins, etc.


Do not forget that BTC (and also all the other cryptos) are currencies, use them

[sezecastronomine]

Taxes on mining? Buaahhahahahahahahahhaha. 

+1.. The best thing about crypto is that you do not have to pay any taxes..

When you spend the coins, tax man might ask.

Yeah, they could.
What I try to do is spend most of my coins directly. I buy online in shops that accept bitcoin, buy directly from people that accept bitcoins, etc.


Do not forget that BTC (and also all the other cryptos) are currencies, use them

Lest we forget, "shift before buy except after mine".