Since an LLC is taxed as a pass-through entity, how is the cost basis calculated if you had personally bought the same crypto asset before setting up a mining LLC?
If the mined coins are kept separate from any personal wallet do they have their own cost basis?
It’s best to consult your tax attorney or CPA for this question. It’s not wise to receive personalized tax information off the internet from complete strangers.
All business transactions should be kept separate from personal holdings. This can be done through separate wallets or individually classifying each transaction. This should be fairly simple since you can always check your disbursements from the mining pool. There is some clarification needed as to the time at which the mined asset is considered in your possession and thus taxable, whether when it shows up in the pool or is transferred to a wallet you hold.
The sale of mined assets will follow the FIFO method to determine long or short term capital gains/losses.
I am not a tax professional and this should not be considered financial advise.