"made an exception for mining"
This is why the entire tax system (for most places in the world) need their tax code Thrown Out and rewritten, not edited.
Exceptions, for pretty much anything with enough "pull"... What's the point of a global code when you bend the rules where it matters most?
*feels really bad* I'm glad the IRS doesn't tax me, I dearly hope that those afflicted can undo this taxation
WARNING LONG POST SKIP BELOW IF YOU DON'T NEED/WANT/RELATE TO THE ISSUE I HAVE BELOW (skip by all means)
Again this is a LONG POSTING on IRS advice and my 'unique' USA reporting mining profits situation..if you are
not caught in my trap feel free to skip..this post is my situation and roadblocks games I'm playing to slide by
without giving it all to the IRS (likely a futile quest..but hey)
Actually as a "small business now" and home office and some other deductions for such with the equipment I've gotten
last year i 'shoulda' paid 4k in taxes I paid 550 usd in 2013. (to show a profit..the CPA says IRS likes that)...
this year 2014 it will be the same kinda deal with $3.511k of deductions from last year..the home office biz deductions (whatever they are)
and another equip deduction (likely 50% again 1st year you got equip) of likely 4K
so again I'll probably be OK and pay minimal taxes and hopefully at the 'worst' my equip will make sense vs btc to equip a wash...at worst with BTC going up I'll at least ROI in USD terms
so again probably will pay minimal taxes...and again i expect maybe this to go away by congress in 2015 (due to dumbness)
yeah..you guessed it.....here it comes
being a 'legit' biz I have to show a profit..to use these equip deductions/home biz etc...the catch is...with "mining' under the
current rules I can ALWAYS show a profit...even if coin was 50 usd under current rules the IRS would get 25% of that 50 bucks
and it would be a profit....but the profit would be so small as to make one wonder 'did you show a profit'' as the IRS likes to look
at that you are legit biz and/or does it make any sense with say next year me having now 5K of equip deductions (can take up
to 5 yrs on equip) that I can apply forward?
I DOUBT I could show enough profit in 'trading' bitcoin with a 20% capital gains tax on profits...the fact unless you want it at 46%
capital gains tax if you sell it before 1 year on top of the 25% for bitcoin mining...well that makes no sense ..you'd have to sell
coin older then 1 year to show profit ..so kinda defeats the purpose...and hey trading you get 4 coin a year you'd probably do
ok..but hardly helps my prev continuing equipment deductions....befuddled I am....
ie so..........the catch is ...probably need to buy equip next year (at least modestly) to show that my 'mining biz" can again
make a profit along the lines the IRS expects..use some/all of equip deductions etc...ie a going concern don't ya know
so HOW does one get off this merry go round? To show a profit to IRS I have to be a 'farmer' so to speak to due to biz
status and prev equip deductions that may look sensible to continue....if i DON'T want to continue..how do I wind this all up
in such a manner that I get 3-5yrs of deductions out of all this to at 'worst' a break even point? yeah....looks like i need
some modest equip purchases at least for next 3 years damn it (CPA says show a profit and at least 5 years to look like
legit biz)
so yeah ...due to me 'having' to report (see prev posts on circumstances..ie good thing IRS was a calling maybe) ...I have
managed to do better then buying coin last year 2013...and maybe break even in a btc buy vs equip buy kinda thing this
year....but looking at 2015 on 'mining?' I'm thinking I may have a pretty good tax burden unless I can find some equip that
at least makes sense to ROI in regards to btc to equip and $$$ to ROI at worst
any advice helpful...I've said this before if you are NOT mining and have not gotten caught in my IRS issues from previous
posts..the smart thing is just don't spend any btc or trade on exchanges (they can keep track of that) ...and just HOLD
till 2015...then when as i hope rules change to something more sensible (likely) you can just go 'gasp' I had a great year
and report at that point in 2015 (if it makes some kinda sense...like only $$$ paid are if you sell coin etc) anyway report it
then as a 'good' year (or not)..don't be caught in the fly paper like me!
anyway ....so far so good ...but feel like quite the hamster on the equipment treadmill at current time
last point w/o equip this year tax burden was 4K with equip this year and 12 more coin made tax burden is 5K (assuming
deprecation this year) so again made sense last year 2013 and this year 2014...completely befuddled
on if i can stay on the hamster wheel for 2015? Unless some of you boys are making 'big bucks" trading bitcoin??? I'm
frigging stuck on an equipment hamster wheel! (well maybe I can wind it down somewhat in next 3 years???)
obviously befuddled but so far treading water...
Searing
