What are your top crypto mining tax questions?

Cryptocurrency
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#1

We are interviewing a tax professional next week, and I want to bring your top questions to him, record the answers, and then bring a video and written guide within two weeks!

Please drop your concise cryptocurrency tax questions below!

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#2

How far back do I need to go when reporting my crypto earnings?

Are stablecoins taxable since they are a one for one exchange?

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#3

Two big ones I cant seem to find a solid answer to are:
1.How do you report Social good coin earned during the 100% crypto back campaign and after it ?
2. Are Defi nodes considered lending in the eye of the IRS or just income?

Thanks for this I am sure I am not the only one still working on their taxes!

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#4

If we have just invested but haven’t taken any profits - the reporting??

Also for mining - if it goes into a cold wallet - do we report?

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#5

At what point does it make sense to start a company for mining.

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#6

What’s the best tax preparation software if there is one that exists to help with filing taxes and not get into trouble with the IRS in the future?

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#7
  1. What are specific recommended tax strategies and techniques to lower your taxes for the small business miner?

What I have personally found in a lot of my businesses is the experts in tax planning have a recommended method / path to follow and implement.

  1. Biggest Tax Mistakes your clients make and how to avoid them?

  2. Hidden write offs that most people do not think of?

This video should be awesome. Thanks for doing this. Anton

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#8

When do we claim mined coins? When they are actually mined or when we have them payed out?

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#9

Since we’re now being taxed for mining.
Are we able to write off hardware purchases such as new mining devices.
Are we able to write off hardware on a personal level or just as a business. And if so, is there a threshold limit we have to achieve first.

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#10

Are we taxed twice if we sell the mined coins for dollars and send the dollars to our bank account?
I was thinking you’d have to pay capital gains on selling the coins and income tax on the dollars you take out.

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#11

What is the best method to track purchases, sells and transfers? What software program does he recommend?

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#12

I have 2 questions!

  1. Can the cost of mining (rig, electricity, misc fees) be applied to the taxes (minned crypto tax, capital gains) ?

  2. Hobby vs Business? After reading the 9 factors, hobby mining seems like it could loosely fit in the description even if you don’t rely on the funds for my livelihood, if I HODL I could make an argument that I will rely on the crypto for retirement or a rainy day. Any advise on how I could claim mining as a business?

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#13

Pity we couldn’t do a similar feature for us UK miners

#14
  1. I was told by my CPA even holding a coin (and not selling it) will be taxable - any gains you make need to be reported, even if you don’t sell. Is that true? That seems wild to me.
  2. Are you taxed when your coins from mining come into existence, or taxed when you they are paid out?

The second question is interesting, because the coin could fluctuate in price before I pay it out, thus affecting our tax liability. Thanks so much for doing this man! You’re a good person. Stay hungry.

Best,

random internet stranger

#15

Can one deduct gas fees, transaction fees on CEXs, or fees charged when staking/mining?

Is there still no wash-sale rule in crypto?

If you turn your mining into a business, what sort of “home office” deductions can one take advantage of? Is it better to start an LLC or an S Corp? Can the trading of other coins (not ones you’ve mined) fall under the same business?

I saw a service through which you can send illiquid NFTs to a wallet on order to claim the capital loss. Does that work if there’s no transaction showing payment? Also hypothetically couldn’t one make a new wallet and “buy” the NFT from themselves, so long as that wallet isn’t officially tied to them?

I’ve also heard that you actually want to be in a capital loss when mining so as to not get double taxed on capital gains. But that confused me since, so often, you hear about miners holding onto coins until their value rises. Could you please shed some light on this?

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#16

If I receive crypto by mining and also receive that “same crypto” from being a host, should the earnings be kept separately?

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#17
  1. Can personal items can be transferred to business and business can be invoiced for those items at fair market value?

2 .Can I write off the time it took to research how to start the business and all related research about cryptocurrency mining?

  1. Can I write off meetings and lunch that I had with friends talking about how to start a business and cryptocurrency mining?

  2. Can I write off the cost to create the LLC?

  3. Can I write off full cost of equipment (the cryptocurrency miners) or does it have to be depreciated every year for x amount of years (the miners are only profitable for around 3 years).

  4. Is mined cryptocurrency taxed different than traded cryptocurrency ?

  5. If in the future I want to get more solar panels to power the mining machines, would those be a write off?

  6. Can % of internet usage to have the miners connected to the internet 24/7 be a write off? EX: cost of internet = paying 100 a month, 1200 a year, 10% used for mining, 10% used for research $120 deduction

  7. Can I write off electric for the amount the machines use? EX: cost of electric = 1gpu = mined hours * cost per kWh * watts the gpu uses (estimate is fine)

  8. If I started buying the machines and using them before I started the business can everything still be put under the business?

  9. If I purchased machines last year but they are still not received or online can those be written off for 2021 taxes even if I dont have the machines yet?

  10. Can machines purchased from someone in person with a cash payment be written off?

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#18

What would be the best way to structure the business?
Many of us are retired and not interested in paying social security self employment taxes.
Further, spent a lot of $ on equipment last year, and want to write off/depreciate to offset mining and trading gains.
I think most everyone understands short/long term capital gains, would like to hear more about tax harvesting.

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#19

5, 7, 8, and especially 10

#20

This would be great!
I’d want to know if the miners I bought this year (and still use) could be claimed as equipment and written off while waiting for my DBA to be approved and the electric I’ve used (3 S9s and a FutureBit Apollo BTC). Even with those I earn about .01 BTC a month.
How do I separate electric cost? (what the miners use vs my regular electric)
Can I write off internet expenses?
Can I allow people to “invest” in the business and pay them a dividend?

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