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Author Topic: IRS and Legal Miner in USA may not be such a bad thing now with price/equip/FUD  (Read 1090 times)
Searing
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October 05, 2014, 09:31:21 PM
 #1

NOTE LONG POST  WARNING FEEL FREE TO SKIP (or put me on /ignore or whatever)

ON FINDING OUT BY HAPPENSTANCE that being a LEGAL MINER according to IRS in USA may NOT be such a bad thing......(shudder bare with me)

well ...for those who know about bank error last summer and me forced to file as a "legal miner' in the USA....well....everyone got a good yuk yuk on my account
(hey bank error...to keep all happy looked really really good i was legit alt coin business according to the 2013 alt currency USA guidelines don't ya know)

anyway....supposedly owed 4k last fall for mining did not have to pay zip...same is prob true of this year due to equip orders etc (which the IRS lets you take
off as computers 5 years 100%....essentially 20% taken off gross income per year as applies to your taxes... comes out to .ie 25% in real cash if you have a tax bill due
on payment....they won't give you $$ but will take it off tax bill owed....(not a problem for me)..so equip wise did not have to pay the 4k last year 2013 when
I backed into being a legal miner....so that Titan now instead of 10k costs me in real $$ as a legal miner only 7.5k with tax breaks...well got my attention.

Also all them nice coin the IRS told me I had to pay mining taxes on 1100 coin from DEC 2013 at 25% (well equip got me out of the 4k tax bill but still) if I was
to sell that now at 300 and show a loss...well probably will hold.... but have other options if btc really went to 10 bucks or some such..you can add to the fun
and FURTHER lower your taxes ...like if you bought land at 1100 and sold it at 300 a capital loss..I don't plan on doing this but an option as well.

So for those who were 'equipment heavy miners"  or got a NO ROI KNC Titan for 10k like myself plus other equipment that may or may not be the wisest thing
you've ever done..you MAY want to ask your CPA if perhaps going legal... as an alt currency biz is the way to go
to salvage something this year if it really really goes way south of 200 usd or something silly....if by doing so you can salvage 25% off of your BTC equipment
in depreciation (5 years considered computer equipment)  and pay no taxes as was my case in 2013 and likely this case in 2014...well hell worth asking a CPA
I myself can only go by 2013 (did not have to pay 4k taxes on mined coin) and 2014 (likely the same)

BE AWARE however I have no other accounting issues ..i pay on what I mined...I HAVE ALWAYS HELD so no issues with that accounting mess under 2013
quidelines tax wise........you hold them after you pay your (or in my case offset by equip) taxes of 25% mined....thats it...holding you are golden....tax wise.
and again due to equipment I had that offset any of the 4K I should have paid to IRS in 2013...same is likely this year with btc price.

If BTC goes below 200 usd (when I start to go underwater)  imho we are all screwed anyway ....my views above are options to salvage what you can ...but from where I'm sitting
right now...it is looking better then if I WAS NOT a legal miner *hard to believe I know but so I've been told by my CPA...* but again I was backed into this
my situation my be unique.

hope this helps ..and again I'M HOLDING ..still have every coin I ever bought or mined...as to others with more complicated IRS issues avoid
the above advice..but for me holding with my equip investments like myself you may want to ask a CPA.....As to myself and the reason
for this thread....I looked around and went ..well this could be worse!

again just my circumstances that MAY help someone else in perhaps over their head with equip/and price they
got into BTC at..this MAY help ...but only your CPA could say for sure...and again I've always held on to all my coin
be sure to keep that in mind as well when dealing with legal miner status to IRS..my situation may be simplified compared to your own.

Searing















 

 

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1542145320
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philipma1957
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October 05, 2014, 11:29:47 PM
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Most likely my decision to be 100% above the table will be helpful if I want to take some gear losses.

I mine alt coins with https://simplemining.net...
I see BTC as the super highway and alt coins as taxis and trucks needed to move transactions.
Searing
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October 06, 2014, 04:53:47 AM
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Most likely my decision to be 100% above the table will be helpful if I want to take some gear losses.

yep what I'm saying if BTC really tanks and you are too into gear...(at least last years from when I started with this years)
may want to run the numbers...I started in oct mining (jupiter knc) and also will get NO ROI Titan in oct....so split years
vs coin made also helps this process

anyway I got stuck having to declare....may work out better if BTC continues to 'act out' so to speak














 

 

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SMB-2525
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October 06, 2014, 10:56:10 AM
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This first year, I will expense all of my equipment and take a tax loss. At BTC $300, my tax basis is lower so when I eventually sell any coin I mine this year, the capital gains will be larger. I have offsetting income to apply the expense and a tiny operation. I will be profitable on BTC on 2015 unless something induces me to buy new equipment instead of just buying the BTC.

For new operations like mine, I see no reason not to play it straight. I figured the IRS would screw over holders of BTC as of 1/1/2014 and it reads above like they did.  If I had BTC as of 1/1/2014 I would just carry it internally at whatever the right basis would be (cost of mining) and then declare the gain on sale. If the IRS did not like that approach, we can discuss it in tax court. I bet if this happens, the IRS will lose. There are some big BTC holders out there - get your popcorn. I AM NOT A TAX ATTORNEY: just a small businessman who plays by the rules and pays my fair share.

Other than the handling of legacy BTC (which appears to be a problem - I have not studied it), I see the IRS rules as reasonable as anything we get from the IRS.
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