Mining crypto how to deal with the tax

JibJabWibWab · 13-04-2021 03:38PM

Mellor wrote: »

Actually, while we’re on the subject, the bit is completely wrong too.

Say you earn €100k in a year.
You’ll be taxed a fair whack in income tax.
Your 100k earnings will also be hit up for PRSI.
Then there’s the USC charge on that same 100k.
Maybe you use that to keep the car on the road. Out comes the Motor tax.
Haven’t bought yourself anything yet your out 40+k on tax so far.

Invest 10k in crypto. And the bulk of the rest on clothes, groceries.. You’re paying VAT. A few beers? Paying Excise now too. We’re over 50k on tax now.

End of the year, and that crypto is worth 100k. Cash it in. Revenue wants 30k.
You have the rest, but you a new car. Import a car you’ve always wanted €52k. You need to pay VAT, and VRT. That’s 18k for the tax man, all you have left.

€100k earnings. And in total, you paid €100k tax.

You can’t be taxed twice. :pac: :pac:

The key word is asset, but carry on... :rolleyes:

JibJabWibWab · 13-04-2021 03:39PM

Mellor wrote: »

If that were true, everyone would get paid in crypto and collect and reduce their income tax bill to zero.

Can you point to anything that says out that income has to be regular to tax liable?

Maybe I said ask to be paid at irregular intervals too.

We are specifically talking about mining crypto, but carry on... :rolleyes:

JibJabWibWab · 13-04-2021 03:40PM

Bob24 wrote: »

And btw https://koinly.io (crypto tax calculation service with country specific rules) does include mined crypto in the income tax section of their tax reports. Not that it comes as a surprise, but just another confirmation.

They might not be aware of the exception Revenue has made for one poster on this thread though ...

Well done Bob, another random link that doesn't say what you think it says...

JibJabWibWab · 13-04-2021 03:43PM

McGaggs wrote: »

Dear job, please pay me at random intervals, in various cryptocurrencies. No, need to do it through payroll, it's not taxable.

We're specifically talking about tax on mining in this thread... :rolleyes:

Mellor · 13-04-2021 03:49PM

JibJabWibWab wrote: »

The key word is asset, but carry on... :rolleyes:

Currency earned working is income, not an asset. That’s the point. lol

The earnings were subject to income tax, then the portion that was invested, it treated as a capital asset and subject to capital gains.

JibJabWibWab wrote: »

We are specifically talking about mining crypto, but carry on... :rolleyes:

Earning through mining is still earning.
Just like if your a doctor, handyman or bus driver.

I think the list of words you don’t understand is growing with every post you make.

SlowBlowin · 13-04-2021 03:55PM

OK, so how is the income tax charged ?

When I first mined my coins they had a value of $ 0.37, would that be the price my income tax would be based against ? If that was the case then I owed about $93, less than the threshold.

Then I pay tax, CGT, when I sell/trade ?

So essentially I am fine if they base the value against the market price of the coin at the time of mining.

The J Stands for Jay · 13-04-2021 03:55PM

JibJabWibWab wrote: »

We're specifically talking about tax on mining in this thread... :rolleyes:

What makes mining crypto different from mining gold?

The J Stands for Jay · 13-04-2021 03:57PM

SlowBlowin wrote: »

OK, so how is the income tax charged ?

When I first mined my coins they had a value of $ 0.37, would that be the price my income tax would be based against ? If that was the case then I owed about $93, less than the threshold.

Assuming you don't have other income that's using up your tax credits, then you would pay not tax. You'd still need to do a return though.

Mellor · 13-04-2021 04:02PM

SlowBlowin wrote: »

OK, so how is the income tax charged ?

When I first mined my coins they had a value of $ 0.37, would that be the price my income tax would be based against ? If that was the case then I owed about $93, less than the threshold.

Then I pay tax, CGT, when I sell/trade ?

So essentially I am fine if they base the value against the market price of the coin at the time of mining.

What threshold are you referring to?

The income value, at the time you earn it. Is added to all your other income for that period. ie your 9-5 earnings.

Then when you sell/trade. You pay CGT on any gain. Which is the trade value less the cost of acquisition (ie the income value).
You additional also get an annual exemption on CGT up to €1,270

JibJabWibWab · 13-04-2021 04:03PM

McGaggs wrote: »

What makes mining crypto different from mining gold?

Do you think someone who mines gold pays tax on the gold before they sell the gold?

JibJabWibWab · 13-04-2021 04:05PM

Mellor wrote: »

Currency earned working is income, not an asset. That’s the point. lol

The earnings were subject to income tax, then the portion that was invested, it treated as a capital asset and subject to capital gains.

Simple numbers to make it easy.

If you mine €100 worth of BTC, and simply hold the BTC, you do not pay income tax.

If it appreciates by €100 to €200 and you dispose. You pay CGT on the €200. That is all the tax you pay.

The J Stands for Jay · 13-04-2021 04:07PM

JibJabWibWab wrote: »

Simple numbers to make it easy.

If you mine €100 worth of BTC, and simply hold the BTC, you do not pay income tax.

If it appreciates by €100 to €200 and you dispose. You pay CGT on the €200. That is all the tax you pay.

Can you link to a source that proves it, preferably from revenue.ie?

SlowBlowin · 13-04-2021 04:07PM

McGaggs wrote: »

Assuming you don't have other income that's using up your tax credits, then you would pay not tax. You'd still need to do a return though.

Well I didn't include them when I mined them, not sure revenue would have known what they were, and I was paying UK tax at the time.

I think I just need to worry if you are taxed once or twice - once would be a gift from heaven.. but I will assume CGT is owed.

JibJabWibWab · 13-04-2021 04:11PM

McGaggs wrote: »

Can you link to a source that proves it, preferably from revenue.ie?

Answer this first;

Do you think someone who mines gold pays tax on the gold before they sell the gold?

Mellor · 13-04-2021 04:14PM

Mellor wrote: »

If you earn €100 worth of BTC, you pay income tax on €100 value, but not CGT at all.
If it appreciates by €100 to €200 and you dispose. You pay CGT only on the €100 gain, no income tax is paid on this portion.
You have paid tax on €200.

JibJabWibWab wrote: »

If you mine €100 worth of BTC, and simply hold the BTC, you do not pay income tax.
If it appreciates by €100 to €200 and you dispose. You pay CGT on the €200. That is all the tax you pay.l

Notice that in your example, and also my (everyone’s) example. Tax is only paid on €200.
No value or asset is taxed twice like you claimed.

Also, it goes without saying but your example is wrong. You can repeat it as often as you like. It is still wrong.

Say you mine €100 of BTC, and immediately convert it to euro. What tax is owed?

The J Stands for Jay · 13-04-2021 04:18PM

JibJabWibWab wrote: »

Answer this first;

I picked a bad example, because you seem a bit fixated on some special status for crypto.

Mining is essentially the same as any financial transaction processing. If MasterCard received their charges in crypto, would they have to pay CGT rather than any other tax?

JibJabWibWab · 13-04-2021 04:19PM

Mellor wrote: »

Say you mine €100 of BTC, and immediately convert it to euro. What tax is owed?

CGT.

JibJabWibWab · 13-04-2021 04:21PM

McGaggs wrote: »

I picked a bad example, because you seem a box fixated on some special status for crypto.

Mining is essentially the same as any financial transaction processing. If MasterCard received their charges in crypto, would they have to pay CGT rather than any other tax?

We are talking specifically about tax on mining crypto.
Try to stay on the subject rather than trying to be a smart ass.

Mellor · 13-04-2021 04:26PM

JibJabWibWab wrote: »

CGT.

Nope. There’s been no capital gain. The value they acquired it at and the value they did use at are the same.

Also;

Do you think someone who mines gold pays tax on the gold before they sell the gold?

Yes. A tax is levied on mined gold based on the net value of the gold when mined. (Amounts and exemptions will vary regionally)

The J Stands for Jay · 13-04-2021 04:30PM

JibJabWibWab wrote: »

CGT.

Explain how, including explaining how it is different to the taxation of income from a different self employed trade.

JibJabWibWab · 13-04-2021 04:31PM

Mellor wrote: »

Nope. There’s been no capital gain. The value they acquired it at and the value they did use at are the same.

Lol that is just hilarious!! :pac::pac::pac:

You can't figure out the gain?

I always suspected you were a spoofer, you've just confirmed it.

Sales price - costs = gain :rolleyes:

JibJabWibWab · 13-04-2021 04:32PM

McGaggs wrote: »

Explain how, including explaining how it is different to the taxation of income from a different self employed trade.

We're talking specifically about tax on mining crypto, stop bringing up unrelated topics.

The J Stands for Jay · 13-04-2021 04:34PM

JibJabWibWab wrote: »

We're talking specifically about tax on mining crypto, stop bringing up unrelated topics.

We are talking about tax. You have performed a calculation on a Blockchain and have received compensation in the form of ETH. Can you explain how that falls under the CGT tax head, rather than income tax. In your answer, can you also point out how it doesn't fall under income tax.

JibJabWibWab · 13-04-2021 04:35PM

McGaggs wrote: »

We are talking about tax. You have performed a calculation on a Blockchain and have received compensation in the form of ETH. Can you explain how that falls under the CGT tax head, rather than income tax. In your answer, can you also point out how it doesn't fall under income tax.

I have mined an asset. When I sell it I pay CGT. Simple.

Mellor · 13-04-2021 04:39PM

JibJabWibWab wrote: »

Lol that is just hilarious!! :pac::pac::pac:

You can't figure out the gain?

I always suspected you were a spoofer, you've just confirmed it.

Again you’re just confirming you don’t understand what a capital gain is.

Here’s a post you made yesterday.

JibJabWibWab wrote: »

Mining is only income if you trade the proceeds promptly and regularly.

Which contradicts what you just said. So that confirms it. Either you were (and still are) just guessing because you don’t have a clue.
Or you’re just trolling because you can’t admit you were wrong. And to top it off, you just gave away that you’re a re-reg. lol.

JibJabWibWab · 13-04-2021 04:40PM

Mellor wrote: »

Again you’re just confirming you don’t understand what a capital gain is.

Here’s a post you made yesterday.

Which contradicts what you just said.

Where is the contradiction?

And this part is just weird;

Mellor wrote: »

And to top it off, you just gave away that you’re a re-reg. lol.

Many Mod's are re-reg's. What's your point?

The J Stands for Jay · 13-04-2021 04:43PM

JibJabWibWab wrote: »

I have mined an asset. When I sell it I pay CGT. Simple.

That's not an answer to the question. You haven't mined an asset. You have been compensated for performing a calculation.

JibJabWibWab · 13-04-2021 04:45PM

McGaggs wrote: »

That's not an answer to the question. You haven't mined an asset. You have been compensated for performing a calculation.

Even Revenue call it mining. Try again.

The J Stands for Jay · 13-04-2021 05:06PM

JibJabWibWab wrote: »

Even Revenue call it mining. Try again.

Still waiting on an answer.

13-04-2021 05:51PM

JibJabWibWab wrote: »

Lol that is just hilarious!! :pac::pac::pac:

You can't figure out the gain?

I always suspected you were a spoofer, you've just confirmed it.

Sales price - costs = gain :rolleyes:

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

Mining crypto how to deal with the tax

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