J_dubbs is 100% correct in everything he's saying.
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/A-Brief-Overview-of-DepreciationEven if a taxpayer meets the preceding requirements for a property, a taxpayer cannot depreciate the following property:
Property placed in service and disposed of in same year.
Equipment used to build capital improvements. A taxpayer must add otherwise allowable depreciation on the equipment during the period of construction to the basis of the improvements.
Certain term interests.
Sure, if you sell it to a fool that will never make money from it. Documenting a sale or a donation to a electronics salvage operation would help as well. But if it is never "disposed of", then I would follow IRS guidelines not to raise red flags as a precursor to an audit. That's just me, and I do not claim to be a CPA or a tax attorney. I'm just a guy that fills out my own schedule C.
The buyer being a fool thing is tough... I mean, I bought a cube high with USD right when they came out, mined BTC paid for the next 3 cubes and each was cheaper than the one before it. My first cube cost me $1,000 and just last week I sold it to someone for $275, mined with it for oh I don't know 3 months at the most(?). Not very long. Sold a blade for $100, and my average cost on 11 of those was over $230 each. The most I paid for one was $400, yes for one blade. So I sold a blade and a cube for $375, then turned around and bought some BTC and paid for most of a 180gh/s Antminer through a forum seller. I'm selling old gear at a loss to cover new gear, and the spread between selling USD and buying with BTC makes it possible, but also I'm taking on more risk. The thing is, everyone starts mining on the outside. They purchase with USD, maybe eventually they stumble across Jones Gear and think it's full of the best prices. The best deals involve the most risk. I find a group buy, I send some BTC to a complete stranger known only by a forum name, prepay a label, and then hope that my gear arrives. Luckily it always has, but if it doesn't there's no buyer protection on these transactions, and that level of risk is needed to purchase at prices better than the fools.
See, the fools are just new, and we all started out like that. Maybe they aren't quite fools but just not willing to trust a stranger for a purchase on the forums but still ballsy enough to speculate on BTC, but everyone starts somewhere and it's gotta be in their comfort zone, which means purchasing with dollars for many starting out. I just sold a BFL Jalepeno for $120, will that guy ever make money off it? If we keep trading sideways, never; if BTC goes to $5,000 he should see profits, but to achieve that he might need to keep it plugged in a few months and operate at a monthly loss hoping for BTC to trend up again. It's impossible to say anyone will "never make money off" something because that depends entirely on where BTC trades at on a future date unknown, and the further out you go the more unpredictable it is. People unplugged their miners when BTC was $30 because the electricity was costing more than the revenue. One BTC @30 per month revenue just wasn't enough to cover the extra $60 in electricity. Well, ultimately they missed a chance to have thousands in profits at the end of 2013 because they decided to unplug and stop speculating. Everyone with less skin in the game pays more, it's almost part of the learning curve.
And thanks for being a good sport about the oven stuff. I wasn't trying to pick on you it just was the easiest example to reference.
Edit: I also believe "useful life" of equipment is to be based on methodology that means "expected profitable life". If you have evidence or reason to believe a piece of equipment will operate at a monthly loss after the first year then I don't believe you should be putting it on a depreciation schedule. No evidence on planet Earth thus far indicates that ASIC mining equipment will be operating efficiently for mining after one year. The conservative approach in accounting assumes nothing about bullish speculation on pricing to concoct a bloated useful life on equipment to justify a depreciation schedule. Conservative assumptions in accounting are to be based on experience and historical performance, not speculation.
