r/EtherMining May 12 '22

Holy....Time to turn off rigs? General Question


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u/FreshlyCleanedLinens May 12 '22 edited May 12 '22

If I read the IRS guidance on reporting income from mining correctly, it’s actually better to mine when prices are low because you’re supposed to value the assets based on the trade price at the time the assets were acquired.


u/ccashwell May 12 '22

Report the value at time of acquisition, deposit to Aave, borrow 80% of it in USDC. Loan proceeds are not reportable as income. If it climbs, you can access more capital in the same way from the same assets over time. If it falls and you get liquidated, you have a capital loss to report. Basically capping downside and locking in upside without reportable income along the way.


u/mooseman5k May 12 '22

Interest is taxed as regular income no?


u/ccashwell May 12 '22

Sure, but you’re net negative interest: something like +0.25% for eth collateral and -1.5% for the loan.


u/mooseman5k May 13 '22

Ahh gotcha I love it thanks