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43
votes
8 comments
rejected

Please add in "Cost of Cloud Mining Contracts" and "Cost of Owning Mining Rigs"

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Suggested by A-Aron on 09/23/2017

This would be of value, because it would help determine whether you are being taxed as an investment or as additional income from being self employed like owning a mining rig. Very different tax implications and percentages that you are taxed at, will also help factor in your cost in cloud mining and hence get to a true tax valuation to determine a loss or gain, i.e. I made purchased a cloud mining contract for $150 and made $450 over the tax year, so my net gain is $450-$150=$300 which is what I am taxed on......make sense? Has tax implications for how the transaction is treated.
Rejected:
This should be dealt with as part of the SE business expenses.
Comments:

  • A-Aron on 09/24/2017

    I believe you can tie the contract cost to the bitcoin or other crypto currency address, as in order to initiate a contract you have to specify your bitcoin or other crypto currency wallet, so if you tie it to that, then you should be fine and be able to figure out the true "profit" net value, i.e. gross profit - costs = net profit or value.....

  • user3o847 on 10/10/2017

    So this is very important. I purchased a "lifetime" contract for X amount of BTC. This contract pays out in BCH, until no longer profitable. There's also electricity fee's and administrative fees that need to be taken into account which are deducted from the payout. How do I figure out the cost basis of each payout since it was paid for up front. I can probably export a spreadsheet from the pool's website, but I'm still at a loss on how to calculate the gains.

  • MW on 10/14/2017

    I would like to know how to add in costs of building a mining rig. Note, income as a side hobby not an official business.

  • A-Aron on 11/06/2017

    Also keep in mind that when you pay with Bitcoins from your wallet, maybe you can track that cost, but if you don't....if you pay with your bank account, credit card, paypal or some other means of exchange, you would have to have the option of over riding the cost and putting in the correct cost of a contract.

  • A-Aron on 11/06/2017

    I agree, you need to be able to figure in costs in addition to the cost of a contract, such as kW used per day, charge per kWh, some companies charge you an additional weekly fee on top of energy costs for maintenance, cost of mining rigs and other costs they could possibly hit you with. All of these costs need to be captured in order to understand the true profit.

  • Hasherz on 12/20/2017

    All costs regarding creating the cryptocurrency needs to be added to this product to be useful for me.

    I'm running a mining farm as a business, so the "cost-of-coin" for me includes:

    -Rent for location
    -Electricity bill
    -Hardware
    -Internet access
    -Driving to/from mining location
    ++

    It would also be nice to choose timeframe for how long a cost should be written off, and at what %.
    If I buy property (a location for mining), this cost needs to be written of over 20 years.

    Cheers

  • LanceS on 01/01/2018

    Possible approach that would scratch multiple "itches".
    1. Approach as a means to capture Production/Acquisition costs.
    2. Start with a means for a subscriber to enter a defined cost per coin or per period of time.
    3. Potentially expand to include a calculated value based on user input (capital costs, operational costs, contract costs, etc).

  • Smed on 01/07/2018

    I purchased some cloud mining hashrate and everyday receive some coin in a wallet on the miner site. I can choose to save them there to buy more hashrate or receive them to my personal address. Due to minimum withdrawal required, I can't pull out everyday's balance. Some interpret that mining have to pay tax based on price when mined. But if I don't receive out of the site's wallet, it could be interpreted that I pay tax only when I receive the coin into my personal wallet (Trezor or whatever). My difficulty is that I don't track the amount and coin price every day its mined and I don't see this information on the cloud miner's site (other than graphically). I'm thinking to consider the price only at the time that I withdraw to my personal wallet. What are other cloud miners doing for tax considerations? I understand that my purchase of hashrate is an expense, tho when I reinvest my mined coin this gets complicated without details on every transaction that I don't have access to. Appreciate thoughts (I realize the response will not be tax advice). Thanks,