Bitcoin Miners Can Escape US Taxes by Mining Direct to IRAs

Bitcoin Miners Can Escape US Taxes by Mining Direct to IRAs

U.S. clients of Compass Mining can now avoid tax on the bitcoin they mine by sending them direct to individual retirement accounts (IRAs).

  • Through a partnership with Choice IRA, a crypto-friendly retirement offering by digital asset custodian Kingdom Trust, Compass clients can mine bitcoin without triggering a taxable event.
  • Compass provides individual miners with a hosting facility and operates their hardware for them, in what could be seen as an AirBnb-esque model for mining facilities.
  • The miners might be discouraged by having to pay tax twice: once as income on the bitcoin they mine and again on the capital gains when they sell.
  • The Compass arrangement allows clients to circumvent this requirement by mining direct to an account with Choice IRA by purchasing mining hardware with funds in their Choice account.
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