Co-locations typically tack on administrative and rent fees on top of electric, thus bringing the final price difference to not too much cheaper than home mining unless you have very high power rates. But just for sake of argument, say you are getting free electricity with no other costs involved, the revenue per day is still only around 75 cents per card, so it will still take 2 years just to pay off the card.
Of course in the real world there are always extra costs involved, even with free power you still need the rest of the rig to actually mine with, as well as time and effort maintaining the rig, watching for profitable coins to mine, etc. As far as tax deductions, sure they may help you pay less tax on your profit, but since current profits are basically zero, they will do nothing to increase your income. If you buy new equipment and mine all year and make close to nothing, your tax deduction is not going to help unless you are looking for a way to offset your other income. Even then there are much better ways to do this, preferably contributing the max into your retirement savings.
So really the only people where mining with new GPUs would make sense for right now actually are the gamers. Someone who is going to buy the card regardless of how much it makes in mining. That type of person can effectively get their card at a discount over its life by mining part-time (when not gaming) and not necessarily be worried about getting all their money back, but just offset some of what they paid is a bonus. Kids living at home or in a college dorm come to mind as they are usually the ones with so-called free electricity and they only need to worry about recouping the cost of the GPU (assuming they already had a mining capable PC).
So from a serious miner perspective, meaning one who is buying hardware solely to mine with, it makes no sense right now to invest in equipment. The only ones doing so are what I like to think of a speculative miners, who are maybe at best breaking even, or at worse mining at a loss, hoping that in the future coin prices recover and they can earn their money back. But at this point you are better off simply investing directly in the coin since it is now speculation on the coins future.
Yes my wife works at home and my trades in early 2017 are taxable, So in my specific senario i can offset some of that by buying equipment. As you mentioned Im already maxing out my 401k contributions savings to the max irs yearly limit. But im also trying to maximize my tax deductions. That means i'll sell the big losing coins to offset the early 2017 trades.
I do plan to hedge from the stock market and borrow 1/3 of my 401k in middle of 2019 and buy some btc, That way im averaging down on btc at the lows and hedging against the 401k mutual fund stock market that has been on a near decade bull run.
I generally like buying brand new equipment. You get like a 30 percent power efficiency for hashrate with the new 20 series which works great in the long game and hold better value, Plus from a business point of view easier to provide receipts for proof of purchase when doing tax accounting.
Does this sound like a generally a good plan for someone in my senario?
fyi, My risk tolerance is high and I got a day job. If things don't go as plan it would suck but its a risk i can afford to lose,
My goal is to 10-20x gains in 4-5 years and be ready for the next bull run. I want life changing money.
