Mining crypto how to deal with the tax

SlowBlowin

Deleted User wrote: »

Accepting this for a moment - what are your costs in this scenario? Is it 100% gain?

Costs in mining for me were the initial cost of hardware and then the electricity and replacement parts (graphics cards).

JibJabWibWab

[Deleted User] wrote: »

Accepting this for a moment - what are your costs in this scenario? Is it 100% gain?

Miner, electricity and whatever other cost's you can justifiably claim.

Even if hypothetically there were no costs, 100% gain still falls under CGT.

The post was an insight into Mellor's lack of experience or knowledge in anything tax, business or finance related, it is actually hilarious that he would post that.

Anyone who takes him serious needs to reconsider...

relax carry on

Jesus, this is painful reading. If anyone wants to confirm the treatment that everyone except one confused poster then I suggest you contact Revenue and request written confirmation of the treatment so you can remain tax compliant. You'll have to explain exactly what mining is, what activities are carried out and the values of the coins mined in euro. You are asking them if the mining activity and coins derived from it are subject to income tax. Also ask for confirmation of the tax treatment sale/exchange/gift of the mined coins after they have been mined. Specifically ask what purchase price you use in your CGT confirmation.

For reference the below link was the first one I found from a Google search on the treatment of mining. The company seem to be tax advisors. Surprise, surprise, they seem to agree with everyone except the one poster convinced it's all CGT.

https://doylekeaney.ie/news/crypto-assets-high-level-irish-tax-considerations/

JibJabWibWab

relax carry on wrote: »

Jesus, this is painful reading. If anyone wants to confirm the treatment that everyone except one confused poster then I suggest you contact Revenue and request written confirmation of the treatment so you can remain tax compliant. You'll have to explain exactly what mining is, what activities are carried out and the values of the coins mined in euro. You are asking them if the mining activity and coins derived from it are subject to income tax. Also ask for confirmation of the tax treatment sale/exchange/gift of the mined coins after they have been mined. Specifically ask what purchase price you use in your CGT confirmation.

For reference the below link was the first one I found from a Google search on the treatment of mining. The company seem to be tax advisors. Surprise, surprise, they seem to agree with everyone except the one poster convinced it's all CGT.

https://doylekeaney.ie/news/crypto-assets-high-level-irish-tax-considerations/

Read the bloody thread. That link has been provided already and it doesn't say what you seem to think it says.

It actually confirms my position.

If you mine crypto and hold it you are liable for CGT when you trade the proceeds of your mining.
You are not liable for income tax as well as CGT.

The J Stands for Jay

JibJabWibWab wrote: »

Read the bloody thread. That link has been provided already and it doesn't say what you seem to think it says.

It actually confirms my position.

If you mine crypto and hold it you are liable for CGT when you trade the proceeds of your mining.
You are not liable for income tax as well as CGT.

Try reading further than the first line:

"It is likely that profits derived from crypto mining activities, whether carried on by an individual or a company, would be regarded as trading profits subject to income tax/corporation tax rather than CGT."

relax carry on

JibJabWibWab wrote: »

Read the bloody thread. That link has been provided already and it doesn't say what you seem to think it says.

It actually confirms my position.

If you mine crypto and hold it you are liable for CGT when you trade the proceeds of your mining.
You are not liable for income tax as well as CGT.

I really hope you don't work in this area. The below section from article relates solely to the mining activity and not the subsequent disposal of the mined coin. Can I ask what you think this part of the article means?

"It is likely that profits derived from crypto mining activities, whether carried on by an individual or a company, would be regarded as trading profits subject to income tax/corporation tax rather than CGT. The amount of profit subject to tax would be determined using the financial accounts prepared in respect of the mining business. If the mining activity does not amount to a trade, the value of any crypto-assets or fees received for successful mining, less allowable expenses, may be taxable as miscellaneous income."

JibJabWibWab

McGaggs wrote: »

Try reading further than the first line:

"It is likely that profits derived from crypto mining activities, whether carried on by an individual or a company, would be regarded as trading profits subject to income tax/corporation tax rather than CGT."

Try reading some more...

"If the crypto asset transactions are regarded as being a trading activity the profits would be subject to income tax/corporation tax, CGT would apply to transactions in crypto-assets that are held as investments."

It's one or the other, not both.

To evaluate whether it's trading or investment Revenue will consider the following;

"This question is determined by reference to what are known as the “Badges of Trade” and also to related case law. Key factors to consider include, the:

* volume and frequency of activity,
* motive,
* Level of organisation,
* risk, and
* Commerciality."

The J Stands for Jay

JibJabWibWab wrote: »

Try reading some more...

"If the crypto asset transactions are regarded as being a trading activity the profits would be subject to income tax/corporation tax, CGT would apply to transactions in crypto-assets that are held as investments."

It's one or the other, not both.

To evaluate whether it's trading or investment Revenue will consider the following;

"This question is determined by reference to what are known as the “Badges of Trade” and also to related case law. Key factors to consider include, the:

* volume and frequency of activity,
* motive,
* Level of organisation,
* risk, and
* Commerciality."

Mining is one transaction, which is subject to income tax. The following decision to hold the asset as an investment is a separate transaction. It can be either CGT or income tax, depending on whether it is considered trading activity. In this case, it would be similar to a conventional day trader being taxed on gains as income tax, compared to a long investor paying CGT.

You are failing to realise that mining is a separate activity to the holding/selling/trading of crypto.

JibJabWibWab

McGaggs wrote: »

Mining is one transaction, which is subject to income tax. The following decision to hold the asset as an investment is a separate transaction. It can be either CGT or income tax, depending on whether it is considered trading activity. In this case, it would be similar to a conventional day trader being taxed on gains as income tax, compared to a long investor paying CGT.

You are failing to realise that mining is a separate activity to the holding/selling/trading of crypto.

Incorrect.

The J Stands for Jay

JibJabWibWab wrote: »

Incorrect.

Incorrect.

Alkers

How does it work for farmers with vegetables??? Is it not only income when they sell the potatoes or do they have to value the potatoes as soon as they are harvested and treat this as income?

Nody

Mod:
I'm cutting this short; JibJabWibWab you've spent three pages claiming everyone else are incorrect and provided exactly zero links to back up your view point while the other side have provided you with Revenue link as well as accounting firms who're paid to handle taxes telling you that you are wrong. Long standing boards policy is you need to back up your claims with facts; claiming someone is wrong does not do that. If you bring this style of argument to any other thread you will be forum banned for trolling.

OP; your question has been answered. Thread closed.