Official Mining Thread

[OverclockN']

Hardly seems worth bothering with on only 2x 1080Ti's.

Hmm....

[KAC]

lol taxes wut?

[nycdarkness]

Originally Posted by KAC

So how many rigs are you building? Cards?

gonna mine with 2-3 at home and I got 2 rigs of 5 each coming up. All watered lol. Since I am not paying for electricity on 10 of the cards. I don't mind paying some gains tax. I'll take it as the electric bill.

[Riptide]

One could almost assume the reason they made this such a giant PITA is to basically crush crypto. Make it such a giant nightmare to mine or trade that it goes away.

Of course generally while I accept that possibility. I find it a lot easier to believe it is just ignorance and/or incompetence that explains how insane the reporting rules are.

RE: IRS

[andino]

Got an email and a tweet that EVGA had the 1080ti hybrid FTW available.

Went to the computer. SOLD OUT...

3 f&#%ing minutes!

3....

[KAC]

Git faster.

[andino]

Originally Posted by KAC

Git faster.

No ****.

I'd hate to sit around all day hitting F5 though.

[KAC]

Add one click ordering on both Amazon and Newegg. Keep nowinstock.net on your phone with alarm set to on in browser. Don’t wait for email to come in. Alarm rings and nab the damn thing. Also keep Store pages opened for the card you want in your browsers on phone.

[Riptide]

https://ttlc.intuit.com/questions/41...-mining-income
https://www.thetaxadviser.com/newsle...ncy-taxes.html

Remember Coinbase has already been felt up by the IRS once. If you think you can avoid paying taxes and your funds flow through Coinbase. You may be fine. Or you may not.

Good luck.

[andino]

Originally Posted by andino

No ****.

I'd hate to sit around all day hitting F5 though.

Eh. **** it.

Just downloaded a tab auto-reloader.

10 second refresh....

EVGA will pay with bandwidth.

[Seyiji]

Originally Posted by andino

Eh. **** it.

Just downloaded a tab auto-reloader.

10 second refresh....

EVGA will pay with bandwidth.

Bitches don't know bout dat browser cache




Ctrl + F5 to make em hurt :D

[andino]

Originally Posted by Seyiji

Bitches don't know bout dat browser cache




Ctrl + F5 to make em hurt :D

I have cache disabled on the autoloader.

15 second refresh.

**** em!

[OverclockN']

I may quit mining, and have stopped my production for now until I decide. Really don't want to deal with the tax end of it for what little dough my small setup would produce. Not worth the effort. Also not interested in attempting to skirt the tax portion as well, again...it's not making a big enough impact in my financial world to care one way or another.

So... then need to decide if I want to keep the 1080Ti I have coming or sell it. I don't think it would be terribly difficult to sell in this market.

[andino]

Hybrid?

[OverclockN']

Originally Posted by andino

Hybrid?

No. EVGA 1080Ti SC2 Gaming.

I will likely just keep it, but we'll see. Unless someone wants to trade with a ROG Strix. I'd prefer two cards that matched.

[andino]

I thought that the only time you have to pay taxes is when you transfer the bitcoin into cash.

And with that, it's not that hard.

The company that you transfer with has to send you a 1099-MISC federal form.

Chances are that they will not send it.

Also, you pay taxes on it just like anything else. So just save out 30% for taxes and call it a day.

It just makes your ROI a little bit more is all.

[Riptide]

That is incorrect.

If you want to stay 100% legal then you:

1) Claim income for the value of every payout you receive individually every single day from nicehash to your wallet. You claim the value of the payout in USD. If you get paid four times each day then you have to record all four transactions. Think of it like your employer paying you multiple times every day only YOU need to take the taxes out and record it.

2) When you go to sell and convert to USD you also have to pay capital gains taxes on that transaction. This is on top of the tax you already paid for the income when you mined the currency.

It is not all that out of the realm of possibility to end up paying close to 50% of what you get out of this in taxes.

It honestly has me thinking about selling everything right NOW and getting out while I can get a nice price for all this equipment I just bought.

The IRS is ruining everything. If you're not willing to commit tax evasion then I don't see how this is worth doing at this point.

[OverclockN']

Originally Posted by andino

I thought that the only time you have to pay taxes is when you transfer the bitcoin into cash.

That's not what the articles are saying. Several other articles claimed this as well.

When you mine the coins, you have income on the day the coin is "created" in your account at that day's exchange value. You can report the income as a hobby or as self-employment.

Your second income stream comes when you actually sell the coins to someone else for dollars or other currency. Then you have a capital gain (if they were worth more when you sold them than when you mined them) or you have a capital loss (if they are worth less when you sell them). And the gain or loss will be taxed differently if it is a short term gain (you held it one year or less) or long term (more than one year). You will need to keep track of each coin you create (date, value) and when you sell it (date and value).

[OverclockN']

It is not all that out of the realm of possibility to end up paying close to 50% of what you get out of this in taxes.

Exactly. In my case, generating on the low side maybe $300/mo...it's just not worth my time. Worst case, 50% taxes makes that $150. Then it's going to cost me somewhere around $50 to run my PC 24/7.

My life is not going to be affected by about $100 a month. But, it will be affected by having to keep track of all that crap and then annually dealing with the taxes. Not worth it.

[Hapatingjaky]

Originally Posted by andino

I thought that the only time you have to pay taxes is when you transfer the bitcoin into cash.

And with that, it's not that hard.

The company that you transfer with has to send you a 1099-MISC federal form.

Chances are that they will not send it.

Also, you pay taxes on it just like anything else. So just save out 30% for taxes and call it a day.

It just makes your ROI a little bit more is all.

No, the tax laws are completely different now in the US with Tax reform passed recently.

You need to claim it on your tax return and you get taxed when you:

1.) Exchange or Sell the Currency for hard cash.

2.) Purchase something.

3.) Trade it for other Crypto Currency.

Even in Pakistan they are now going after Crypto miners which is why KAC should look in to this prior to spending $8000+ on a mining rig.

I find it funny here that everyone is buying these rigs but the return on investment is small. Especially on these forums, some are spending like I said $8000+ on a mining rig but have only made $40 in the past 2 months, yet electrical + initial setup costs + tax is going to eat away at it and you won't see any return on the investment for years. And that's if the currency stays constant and doesn't tank.

Understandable that the Crypto market itself has increase tenfold over the past 2 years but we're now seeing a down turn in the market and volatility increase. Insider theft has increased alot with the exchange and wallet sites.

I've been approached to build mining rigs, but I want no part in it. The entire purpose of a Crypto Currency was that it was tax exempt and had no affiliation with a Countries Currency and the fact that it was supposed to be untraceable. Now that its taxed and can be traced like the recent Coincheck disaster I think we will start seeing Crypto Currencies losing their value.

[Riptide]

I'm gonna think it over. Mining on European pools and directly to my wallet in alt coins the IRS won't know what I'm doing. The only way to avoid paying the ridiculous double taxation on mining is to lie about it and hide your activity. Not sure I'm comfortable with doing that.

If I decide to sell I'll have two titans and a 1080ti up along with a mining rig frame, two psu, and some various other parts. Gotta strike while the fires are burning and prices are super high. It would be the only way for me to make back even close to what I've put into this.

Anyone who mines and holds is really taking a big risk. You could claim potentially a lot of income on your return and end up with almost nothing to show for it if the currency tanks and you're left holding the bag.

[nycdarkness]

Originally Posted by Riptide

I'm gonna think it over. Mining on European pools and directly to my wallet in alt coins the IRS won't know what I'm doing. The only way to avoid paying the ridiculous double taxation on mining is to lie about it and hide your activity. Not sure I'm comfortable with doing that.

If I decide to sell I'll have two titans and a 1080ti up along with a mining rig frame, two psu, and some various other parts. Gotta strike while the fires are burning and prices are super high. It would be the only way for me to make back even close to what I've put into this.

Anyone who mines and holds is really taking a big risk. You could claim potentially a lot of income on your return and end up with almost nothing to show for it if the currency tanks and you're left holding the bag.

It's self employment tax if your mining from what I gather. that is essentially 15% up to 120k then things change for ss.

https://www.irs.gov/pub/irs-drop/n-14-21.pdf

[andino]

Sorry, I was getting my information from here. 2017....

https://turbotax.intuit.com/tax-tips...ency/L1ZOgU00q

Then I found this on 2018 taxes and bitcoin.

https://www.nytimes.com/2018/01/18/y...irs-taxes.html

All Bitcoin transactions are recorded in a public ledger maintained by a decentralized network of computers. Mining refers to the process in which new Bitcoins are created and then awarded to the computers that are the first to process these transactions coming onto the network. The people whose computers do this most quickly collect a fresh helping of Bitcoins.
These virtual miners must report the fair market value of the currency (on the day they received it) as gross income. Miners are also required to pay self-employment tax — that is, Social Security and Medicare taxes — if the mining “constitutes a trade or business,” according to the I.R.S.

Then I found this page which is AWESOME!!!!

https://cryptocurrencyfacts.com/2017...-s-simplified/

On Cryptocurrency Mining and Taxes: When you mine a coin you have to record the cost basis in fair market value at the time you are awarded the coin (that is profit on-paper). Then you account for further profits or losses when you sell that coin (so as long as you sell it within the year, you can’t owe more than you made if the value of the coin goes down). From there, as long as you are making enough to qualify as being self-employed and not mining as a hobby, you can deduct the cost of equipment and electricity, and then you pay taxes on the profit. In general you owe the self-employment tax if you make over $400. If you made over $400 and would owe the self-employment tax, it is reasonable to consider yourself self-employed for the purposes of mining and file that way. Just make sure to follow the rules presented by the IRS. See: IRS Self-Employed Individuals Tax Center, Can I Deduct Mining Costs?, What you Need to Know About Bitcoin Mining and Taxes, and the above IRS guidance on cryptocurrency (it includes a section on mining).

That leads to this page...

https://www.bitcointaxsolutions.com/...-mining-costs/

After reading that I think I would fall into the 'Hobby" range. Don't know what the cut off is but I'd imagine most of us here would fall into that aside for Dave who more than likely would WANT to go into the "Business" side of this so that he can deduct his electrical, internet, equipment, etc.... Setting up a $10k rig and making $55 a day and $20K+ a year is a lot different animal than me getting $5 a day and $1825 a year.

Still though, anything in the positive is still a positive. You'd be hard pressed to find a business opportunity that has you making money the first day you set it up. Taxes or not. And if you take a loss then you get to deduct that. It just makes the ROI a little longer.

In my case, we already hire a CPA to do our taxes. The ****er gets paid enough to mess with this too. So, I'll pass that burden over to him. If it looks like something that I can make serious money off of then I'll talk to him about incorporating. I really doubt that I'll do that. Really, I'm just looking at paying off a couple of video cards and if there is more left maybe upgrading my computer.

[Riptide]

It's even worse than I thought. You have to pay the self employment tax on top of income tax.

[KAC]

Originally Posted by Hapatingjaky

No, the tax laws are completely different now in the US with Tax reform passed recently.

You need to claim it on your tax return and you get taxed when you:

1.) Exchange or Sell the Currency for hard cash.

2.) Purchase something.

3.) Trade it for other Crypto Currency.

Even in Pakistan they are now going after Crypto miners which is why KAC should look in to this prior to spending $8000+ on a mining rig.

I find it funny here that everyone is buying these rigs but the return on investment is small. Especially on these forums, some are spending like I said $8000+ on a mining rig but have only made $40 in the past 2 months, yet electrical + initial setup costs + tax is going to eat away at it and you won't see any return on the investment for years. And that's if the currency stays constant and doesn't tank.

Understandable that the Crypto market itself has increase tenfold over the past 2 years but we're now seeing a down turn in the market and volatility increase. Insider theft has increased alot with the exchange and wallet sites.

I've been approached to build mining rigs, but I want no part in it. The entire purpose of a Crypto Currency was that it was tax exempt and had no affiliation with a Countries Currency and the fact that it was supposed to be untraceable. Now that its taxed and can be traced like the recent Coincheck disaster I think we will start seeing Crypto Currencies losing their value.

I am in UAE. No income taxes.

Awaits Hapa's decision to sink 20K rigs into bitcoin.

The way I see it is the following. If I have 9 cards mining that is 45 a day. I need to run them for 3.33 months to earn 4500$. This would return half the cost of this whole enterprise. Post that, I can either:

- Sell the crap and recover the remaining 4500$ I spent leading me to break even.
- Keep mining and recover the whole amount in next 3 months, post which everything is a profit.

The electricity here is not worth even talking about. I pay what I pay since in the heat, aircon needs to be on virtually 24/7 anyways. Any other usage by the coining activity would be a blip at 1 cent per kWh so **** that crap. Running them 1 day would pay the monthly bill for the enterprise. My real worries are:

- New ASIC machines coming up end of Q1 start of Q2 that would almost make GPU mining obsolete or make it so difficult you will be earning a dollar a day with 9 cards (highly unlikely)
- Bitcoin tanking in the next 3 months below 10000$ a pop (highly unlikely)

Hence, the urgency to build this and earn back at least 4500 in the next 3 months. Post which I really don't give a ****.

[KAC]

Damn, it seems that if you try to run more than 8 GPUs on the ASUS motherboard, you are going to have a bad time.
The other Z270-A ASUS is OOS in most places and is being price gouged like hell.

[bob saget]

do you think 980ti's will be higher valued? they seem to be going for just under 400US now locally. i love this one but if i could a slight profit i may consider it.

[KAC]

Sure sell it to max out your earnings.

[Riptide]

WTM says 12,000$/yr if I keep mining LUX at current pricing. Take 20% off that because the calculator over-estimates.

$9600/yr after power is paid for. Take that same figure and deduct another 23% for income tax.

$7400. Now deduct equipment costs.

That leaves a grand total of $3685/yr. For all the hassle this is and that is a best case scenario. If I want to sell and convert? Capital gains taxes on top of this. I'd probably end up with 1500$.

I'm selling. And I'll give people a good deal too. I just want what I paid in which is msrp plus shipping.

[nycdarkness]

Originally Posted by Riptide

WTM says 12,000$/yr if I keep mining LUX at current pricing. Take 20% off that because the calculator over-estimates.

$9600/yr after power is paid for. Take that same figure and deduct another 23% for income tax.

$7400. Now deduct equipment costs.

That leaves a grand total of $3685/yr. For all the hassle this is and that is a best case scenario. If I want to sell and convert? Capital gains taxes on top of this. I'd probably end up with 1500$.

I'm selling. And I'll give people a good deal too. I just want what I paid in which is msrp plus shipping.

depreciation is not the same as full amount. personally just keep a ledger and see further details from uncle sam