Topic: How to deal with mining a block and taxes? (Read 80 times)
in my own country,,, the government here imposes a 0.01 percent tax for every crypto trade.. I think the amount is quite small,, but the problem is the government is blocking access to some exchanges which is very annoying.. how could they charge a tax but access to exchange alone is complicated?
Buying Bitcoin is different though. When you buy Bitcoin you're effectively buying an asset. That of course is not taxed.
In most countries there's also an income tax. If you obtain Bitcoin through an activity, for example working for Bitcoin, or mining, etc, that is considered income, and taxed accordingly.
I understand what you mean, butindonnot think bitcoinnisntaxed that way. Read below quotes. In most countries there's also an income tax. If you obtain Bitcoin through an activity, for example working for Bitcoin, or mining, etc, that is considered income, and taxed accordingly.
Crypto Taxes When You Mine Crypto
If you earn cryptocurrency by mining it, or receive it as a promotion or as payment for goods or services, it counts as part of your regular taxable income. You owe tax on the entire fair market value of the crypto on the day you received it, at your regular income tax rate.Cost of power: What is your electricity rate? Keep in mind that rates change depending on the season, the time of day, and other factors. You can find this information on your electric bill (measured in kWh). Electricity is not only required for running computations on mining systems but also to cool them and prevent them from overheating.
Efficiency: This value is a function of the difficulty level and efficiency in the number of calculations that your mining system to win the puzzle. Briefly, it can be formulated as the amount of power that your system consumes (in watts).
Time: What is the anticipated length of time you will spend mining? To maximize the chances of finding a block, most individual miners run their systems for extended periods of time, even 24 hours, if they can afford the bills.
Bitcoin value: The current value of bitcoin is the return on investment of your expenses to mine the cryptocurrency. What is the value of a bitcoin in U.S. dollars or another official currency?
Efficiency: This value is a function of the difficulty level and efficiency in the number of calculations that your mining system to win the puzzle. Briefly, it can be formulated as the amount of power that your system consumes (in watts).
Time: What is the anticipated length of time you will spend mining? To maximize the chances of finding a block, most individual miners run their systems for extended periods of time, even 24 hours, if they can afford the bills.
Bitcoin value: The current value of bitcoin is the return on investment of your expenses to mine the cryptocurrency. What is the value of a bitcoin in U.S. dollars or another official currency?
All what I have known and while using mining profitability calculator are electricity, bitcoin price and mining difficulty. If government tax is among, it should have been included in some articles and mining profitability calculator.
I am not a miner and I may not fully know much about mining. philipma1957 can be helpful about this as he is a miner.
If you buy bitcoin, would you be taxed? No. If you mine bitcoin, then you will also not be taxed. Miners will pay for electricity but have their coins with them until they want to sell it. The tax will also be like those that buy bitcoin and want to sell it, the tax is certain percentage of the capital gain. The tax (percentage of the capital gain) differs from country to country.
Buying Bitcoin is different though. When you buy Bitcoin you're effectively buying an asset. That of course is not taxed.
In most countries there's also an income tax. If you obtain Bitcoin through an activity, for example working for Bitcoin, or mining, etc, that is considered income, and taxed accordingly.
If you buy bitcoin, would you be taxed? No. If you mine bitcoin, then you will also not be taxed. Miners will pay for electricity but have their coins with them until they want to sell it. The tax will also be like those that buy bitcoin and want to sell it, the tax is certain percentage of the capital gain. The tax (percentage of the capital gain) differs from country to country.
Let's say you solo mined a block, and you get the reward and fees. How do you deal with taxes?
For example, the current block paid a total of 6.27 BTC, which at the moment is $247,488.
From what I understand, that would be considered income, and you would be taxed accordingly. In some countries that amount would put you in the highest bracket, where you would have to pay a high percentage in tax, say 40-50%.
What can you do in that situation?, sell half and keep the cash for tax?
Wait hoping that it would raise in value and sell later when tax time comes?
Am I missing something, or basically every single miner that is solo mining ends up paying about half of it in taxes?
For example, the current block paid a total of 6.27 BTC, which at the moment is $247,488.
From what I understand, that would be considered income, and you would be taxed accordingly. In some countries that amount would put you in the highest bracket, where you would have to pay a high percentage in tax, say 40-50%.
What can you do in that situation?, sell half and keep the cash for tax?
Wait hoping that it would raise in value and sell later when tax time comes?
Am I missing something, or basically every single miner that is solo mining ends up paying about half of it in taxes?
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