I admire everyone's passion and willingness to share information on the tax and legal implications of cryptocurrency mining, but let's face it: None of us, to my knowledge, are tax lawyers or accountants.
If you're a miner, talk to a tax or accounting professional to understand your situation. I've paid accountants and tax lawyers enough money over the years to keep me out of trouble with the IRS and structure my finances to be reasonably tax-efficient.
Everyone's situation is different. Talk to a professional. Not doing so could cost you a lot of money in the long run.
Giga has full control of your miners. They set the algorithm they set the pool, the owner of the miner has nothing to do and no power to decide what should happen with his equipment!!!
Also everyone who is looking to place miners there and is not US citizen or green card holder, be aware that you need to register a company in the US because it is already considered a permanent place of production and GIGA is cooperating with the IRS and will tell who the owner is when they ask.
Can Giga Watt please confirm if it's true? They should accepted only US citizens for ICO then!
No need to ask for confirmation from GigaWatt.
That guy is spewing nonsense.
I am not spewing nonsense. But if you think so, please enlighten me
They are managing your shit and not you. You can't switch pools like you want its their business model. I can send you a couple more emails if you wish...
And regarding the legal problems, they were pointed out from me and multiple other people weeks ago already. Feel free to go back, my questions and concerns were by far the modest....
And tax problems are there and will become a serious problem for GIGA if they allow all customers to place miners there. The tax law is clear and so is the definition of a business and a permanent place of production. In the USA in the UK or whatever country you wanna choose...
A business has to know its customers. Placing miners from people in the pods because they bought anonymously some ICO is the complete opposite of knowing what miner belongs to whom...
European Banks cancel accounts and business relations with american citizen and green card holder just to prevent being sued for the support of tax evasion...
But of course america and the IRS will stand back and watch when people make money within the USA, not declaring that income and profit and transferring that wherever they want.
Its not like you already need to declare if you bring money in and out the country or where you got your 10k cash deposit from....
I would not say anything if they would restrict it to American citizen but they don't. And if they get sued because 1 or 2 crooks use their system to make money and they were not stepping in to prevent that, they have to pay big money and guess who will pay for that in the end....
Well this is exactly my point. No-one in here is doing that. They all think its fun and games....
I am a tax lawyer; not in America but thats why I contacted and hired advisors from one of the big four. So I kinda know what I am talking about and can more easily see where potential problems might occur.
However, I am kinda sick and tired and will not reply after this post.
No-one here is reading the white paper where Giga states they will exchange informations with the IRS and that every customer is responsible for his tax and legal setup. It makes it just hard to know what to look for when GIGA can't even outline what their model is...
By operating the miners, setting the pools, doing maintenance and being able to take out the daily maintenance fee, does that leave little room to argue that you are the operator from those miners.
So you are basically giving them a credit, they buy stuff with it and pay you. This could already be seen as a dividend and therefore would fall under a completely different business model than operating your own "farm".
The most worrying part is that they are paying out money for token holder. They don't know who that token holder is, yet they pay again basically dividends to them.
I payed my money, I had hours of conversation with my colleagues in america and multiple other countries to find the right place and this project here is just way to risky.
I am not saying they will scam anyone, but if they don't watch out they can be held accountable for the actions of their customers. And if they get fined, they might have to close and everyone who invested or conducted business looses.
I orderd one L3+ miner, because of the low energy cost and no noise in my house. Now i read about taxes in USA and starting a company there. What is this for aftersales obligation? That obligation of starting a company in they USA for my miner is to mutch for me. Also if dubble taxed then i can better mine at home and pay the energy bill, i think.
I live outside the USA and we have our own tax laws about income. Gigawatt pays tax on energy and loans and .... So i already payed tax for my miner in operation. Then it is calculating decentralised in the cloud on freeware. Gaining i little peace of uniek software what is the value of believe in it by other people. If i cash it in my country to fiat then it is income. Otherwise we gone trade coins for 1 dollar on the taxation date. I also mine by Genesis mining and never heard about tax and they have also facilities in the USA?!
Can GigaWatt officialy clear out this issue for all forner miners.
Thanks
Well yeah based on current tax law, it would be considered a permanent place of production and therefore you already fall under US tax law.
Genesis does not operate your personal miner. They sell you their personal hash. They are paying taxes on their income and they deduct your payments as dividend payments in their system.
Again, if Giga would say you can rent a miner it would be less of a problem. Still you would need to pay tax on your income
Regarding double taxation, you need to contact a tax advisor in your country and ask him for double taxation agreements between your country and the USA. Most big industrial states got these kinds of agreements to prevent double taxation.
This will give you a good pointer. Next step would be to contact a tax firm in the USA, I can give you some contacts from PWC or E&Y if you need. They can check everything on the american tax side.
Maybe you are lucky and in your case its not a big problem, but for me personally it would, I have more than 500 miners in total in our company structure right now.
For everyone else:
Please keep in mind, that every business is going to be audited. Maybe not this year nor next year, but in 5 years maybe. And if they find out who you are and that you mined with the intention of profit (and we all do that) they will check if you are registered or declared the gains in your tax. If you did not its called tax evasion and you might face painful penalties.
And for everyone doubting what I say, contact giga and ask them about miner setup and control, contact lawyers and tax advisors. Better to spend a couple hundred bucks before you get in trouble.
