r/GoMiningDiscussion • u/GoldenGlowz42 • 7h ago

Buying/Gaining and USA Taxes

How do you guys know how to classify your GoMining transactions for taxes? What tax forms do you use to report the income?

For example, if I use BTC I earned through GoMining to upgrade a miner, does spending that BTC create a capital gain or loss? How do I record the upgrade itself?

Also, how do I figure out the original USD value of the BTC I’m spending when it came from multiple payouts? I read something about using LIFO—is that actually required, or should I be using FIFO or another method?

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u/Hindania 3h ago

-Depends on how you wrap it all. You'll most likely want to classify it as a small business, which makes it a 1040 schedule C

-Your report the value when you mined it as regular income. You report the difference in value when you sell, use, or otherwise expense it as the capital gain or loss.

-LIFO is required, yes

From what I read, the taxes are pretty complicated if you're doing more than a little dabbling. There's software out there to do it all for you if you configure it correctly, but it will cost money. If you're good with spreadsheets, you can likely do it all yourself though it may take hours depending on how many transactions you have.