Mining earnings are terrible, I'm shutting down for a while

[cryptbro]

True if you are claiming it as a business expense and going that route.

If you want to minimize your costs then forget having a simple tax return. You may end up having to pay a CPA and have your taxes prepared. So much for simplicity.

Whether it's worth all that hassle for ten grand or less in income?  Meh...

You can't keep writing off the full value of the same equipment every year either.

you get what you pay for in life man... if you only care about the easiest, simplest, fastest way to make money or even just do taxes, crpytos probably not for you.

[akuci]

Everyone got involved in mining. Even my grandmother.
So there is a lot of hardware to reach ROI, and people will not shut down their rigs if the price drops a bit. That way the diff will remain the same, and the price is going down so it's very logical that your profits will drop.
Maybe if BTC hit 4000 levels, there will be a massive GPU selloff.

[Riptide_NVN]

Yah sorry.  Taxes being a pita and expensive weren't something I'd planned on when I started my little 4 GPU setup two months ago. It's a nasty surprise and takes some of the passive out of passive income.  And also adds unplanned for expense.

My bad I guess.

[gotminer]

True if you are claiming it as a business expense and going that route.

If you want to minimize your costs then forget having a simple tax return. You may end up having to pay a CPA and have your taxes prepared. So much for simplicity.

Whether it's worth all that hassle for ten grand or less in income?  Meh...

You can't keep writing off the full value of the same equipment every year either.

Capital gains and losses can be used on personal tax returns for investments.  That's completely different than writing off equipment cost, electricity cost, ect.  We're talking about two different things.

Capital gains and losses are reported on short and long term investments (both have different tax rates) based on current value minus original value when it was acquired.

[Riptide_NVN]

Correct. That comes in when you go to sell.

[gotminer]

Correct. That comes in when you go to sell.

According to the IRS in the USA, you have to report capital gains and losses even if you haven't cashed out to fiat, because they are considering crypto a property for tax purposes.  It is a nightmare though.  I'm still trying to sort through and understand all of this.

Hey you were asking about recommendations yesterday ... I just heard the founder of this company being interviewed on Crypto 101 ... https://cryptotaxprep.com

The interview is 90 min long, but they go very in depth on the subject.

[nsummy]

Let me break it down.  I'll make it as simple as possible below.

NOTE: The fact they want you to claim each payout in USD value for a currency that you are paid for from a pool six or more times a day, and for which the USD value will constantly vary, is a HUGE PITA.

Example:
Say you mine a currency for a year.  It is worth 10,000$ USD.
23% tax bracket.  You owe $2300 on that $10,000 income.  You will need to pay that in cash when you file your taxes.
If you sell any currency during the year to help pay for your expenses or for any other reason.  You will also have to pay a short term capital gains tax on top of the income tax paid.

If you decide you want to claim this as a business expense.  Then for the first year you can write off your equipment value.  After that you will still need to pay income tax, make quarterly payments to the IRS, and also pay the self employment tax.  Oh, and you will still have to pay short or long term capital gains if you ever go to sell.

It is a huge RIPOFF.  You will lost 35-50% of your take when you mine if you follow what the IRS is expecting.

The only alternative is tax evasion.

EDIT:  You can also write off your electric bill and internet as a business expense.  That may help but it is unlikely to cover the 23% (or more) they are expecting to get out of you.

This is incorrect.  You are not taxed on it until you sell it.  If i own a piece of land and find out I'm sitting on top of a giant gold or oil reserve do I have to suddenly claim that as income on my taxes?  If I go outside with a pick axe and mine the gold, so I have to claim it? If I am growing a giant field of corn do I have to claim income while it sits in my silo? No.  Not until I sell it, or trade it, only then does it become income.   Yes the IRS treats it as property, but only when you realize or lose money on it.  What you are suggesting would lead to double taxation:  You would being paying capital gains taxes immediately on what you mined, then once you cash out you would be paying again.

This should be pretty straightforward for those who just strictly mine.  You are paying tax on everything that has been converted to dollars

[holabebe]

sell me your mining rigs!

[lunobird]

Let me break it down.  I'll make it as simple as possible below.

NOTE: The fact they want you to claim each payout in USD value for a currency that you are paid for from a pool six or more times a day, and for which the USD value will constantly vary, is a HUGE PITA.

Example:
Say you mine a currency for a year.  It is worth 10,000$ USD.
23% tax bracket.  You owe $2300 on that $10,000 income.  You will need to pay that in cash when you file your taxes.
If you sell any currency during the year to help pay for your expenses or for any other reason.  You will also have to pay a short term capital gains tax on top of the income tax paid.

If you decide you want to claim this as a business expense.  Then for the first year you can write off your equipment value.  After that you will still need to pay income tax, make quarterly payments to the IRS, and also pay the self employment tax.  Oh, and you will still have to pay short or long term capital gains if you ever go to sell.

It is a huge RIPOFF.  You will lost 35-50% of your take when you mine if you follow what the IRS is expecting.

The only alternative is tax evasion.

EDIT:  You can also write off your electric bill and internet as a business expense.  That may help but it is unlikely to cover the 23% (or more) they are expecting to get out of you.

This is incorrect.  You are not taxed on it until you sell it.  If i own a piece of land and find out I'm sitting on top of a giant gold or oil reserve do I have to suddenly claim that as income on my taxes?  If I go outside with a pick axe and mine the gold, so I have to claim it? If I am growing a giant field of corn do I have to claim income while it sits in my silo? No.  Not until I sell it, or trade it, only then does it become income.   Yes the IRS treats it as property, but only when you realize or lose money on it.  What you are suggesting would lead to double taxation:  You would being paying capital gains taxes immediately on what you mined, then once you cash out you would be paying again.

This should be pretty straightforward for those who just strictly mine.  You are paying tax on everything that has been converted to dollars

That is False.

My sources direct from the IRS.

https://www.irs.gov/pub/irs-drop/n-14-21.pdf

"A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value
of the virtual currency as of the date of receipt is includible in gross income. See
Publication 525, Taxable and Nontaxable Income, for more information on taxable
income."

[Thebestis7950]

TO all the guys not making profit from nicehash
Please turn of all your rigs
The more rigs you turn off the less the difficulty increase
So please please turn them all off or sell them at discounted price
Crypto is dead
Better be quick before your rig is worth zero

[felixbrucker]

I have turned mine off a while ago, but then again i'm using good old 7870's and 7970's so there is that. The heat and noise wasn't worth it as a poor student with a small dorm, even though i get "free" electricity. Due to the recent prices i have sold off most of them for triple their value at the time i bought them a year ago. Seems like a good deal to me. There are other ways to make (more)

[Marvell2]

jesus eth hash rate went up by another 40TH yesteday , so much for cards being in short supply

[2stout]

Mine and hodl, if one is in such a position.

[VyprBTC]

Correct. That comes in when you go to sell.

According to the IRS in the USA, you have to report capital gains and losses even if you haven't cashed out to fiat, because they are considering crypto a property for tax purposes.  It is a nightmare though.  I'm still trying to sort through and understand all of this.

Hey you were asking about recommendations yesterday ... I just heard the founder of this company being interviewed on Crypto 101 ... https://cryptotaxprep.com

The interview is 90 min long, but they go very in depth on the subject.

And because of this ASININE fucking retarded policy, SOMEONE WHO ISN'T ME will not be paying taxes until they sort that shit out. Nope. Not going to happen.

[martyroz]

jesus eth hash rate went up by another 40TH yesteday , so much for cards being in short supply

You realise that this is miners shifting to ETH right?
Because ETH held up better than other mining currencies over the last few days.

There were not 40TH in new hardware turned on 
That's a million 1070's

[Marvell2]

jesus eth hash rate went up by another 40TH yesteday , so much for cards being in short supply

You realise that this is miners shifting to ETH right?
Because ETH held up better than other mining currencies over the last few days.

There were not 40TH in new hardware turned on 
That's a million 1070's

lol I supposed but eth will drop soon too just like every other coin

[Kelarid]

TO all the guys not making profit from nicehash
Please turn of all your rigs
The more rigs you turn off the less the difficulty increase
So please please turn them all off or sell them at discounted price
Crypto is dead
Better be quick before your rig is worth zero

For the people with cheap electricity, it is still very profitable to mine at present.

[Devilz666]

Profitability is surely low but is it actually low?

We mine because we believe that in future the crypto we are mining will give us better returns. So mostly it is about holding for long enough that we gain whatever we set out to.

You really need to start thinking in terms of BTC / ETH /whatever you are holding instead of fiat if you want to mine/trade crypto tension free.

[philipma1957]

Profitability is surely low but is it actually low?

We mine because we believe that in future the crypto we are mining will give us better returns. So mostly it is about holding for long enough that we gain whatever we set out to.

You really need to start thinking in terms of BTC / ETH /whatever you are holding instead of fiat if you want to mine/trade crypto tension free.

good point

https://www.nicehash.com/miner/16yLHLoeyuCLPMXkVpC3gyrRYvwRGwjKJr

this account makes 0.0099  btc a day  or 3.65 btc a year

If I mine and hold all that matters is the price of BTC 1 year from now.

But this gear is paid off fully
the power cost is zero as it is all run on solar energy

Thus I can mine and hold for an entire year. If I need to do that.

[Moondoggie]

When I got into mining I was making maybe $2 per day per card. Then it shot up to $5 per day, and then over $10.
Now we're back to $5. Sure it's lower, but it's still a profit.
Sell your card if you're that worried, there are many people out there who will want to buy them for a passive profit.