1862 lines
40 KiB
Plaintext
1862 lines
40 KiB
Plaintext
WEBVTT
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Kind: captions
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Language: en
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did you know that some Bitcoin miners
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did you know that some Bitcoin miners
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did you know that some Bitcoin miners
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pay virtually zero taxes despite
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pay virtually zero taxes despite
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pay virtually zero taxes despite
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generating six or even seven figures in
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generating six or even seven figures in
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generating six or even seven figures in
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Bitcoin just like the most successful
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Bitcoin just like the most successful
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Bitcoin just like the most successful
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builders of wealth in the world it's not
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builders of wealth in the world it's not
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builders of wealth in the world it's not
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because they're breaking the law It's
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because they're breaking the law It's
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because they're breaking the law It's
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because they understand something that
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because they understand something that
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because they understand something that
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most miners don't You see Bitcoin mining
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most miners don't You see Bitcoin mining
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most miners don't You see Bitcoin mining
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isn't just a way to earn crypto It's one
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isn't just a way to earn crypto It's one
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isn't just a way to earn crypto It's one
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of the most tax advantaged businesses
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of the most tax advantaged businesses
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of the most tax advantaged businesses
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that you can run today I recently worked
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that you can run today I recently worked
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that you can run today I recently worked
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with a client named Dean who was about
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with a client named Dean who was about
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with a client named Dean who was about
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to pay taxes on over $400,000 of income
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to pay taxes on over $400,000 of income
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to pay taxes on over $400,000 of income
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which was 350,000 more than he needed to
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which was 350,000 more than he needed to
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which was 350,000 more than he needed to
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on his mining operation That is until we
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on his mining operation That is until we
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on his mining operation That is until we
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restructured his approach By the time we
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restructured his approach By the time we
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restructured his approach By the time we
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finished his taxable income dropped to
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finished his taxable income dropped to
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finished his taxable income dropped to
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under
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under
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under
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$50,000 completely legally And in this
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$50,000 completely legally And in this
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$50,000 completely legally And in this
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video I'm going to show you exactly how
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video I'm going to show you exactly how
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video I'm going to show you exactly how
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Bitcoin mining can be a tax gold mine
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Bitcoin mining can be a tax gold mine
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Bitcoin mining can be a tax gold mine
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when structured properly as a business
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when structured properly as a business
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when structured properly as a business
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Whether you're mining from your
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Whether you're mining from your
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Whether you're mining from your
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apartment with a single rig or running a
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apartment with a single rig or running a
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apartment with a single rig or running a
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warehouse full of AS6 these strategies
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warehouse full of AS6 these strategies
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warehouse full of AS6 these strategies
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could save you thousands or even
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could save you thousands or even
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could save you thousands or even
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hundreds of thousands of dollars Let's
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hundreds of thousands of dollars Let's
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hundreds of thousands of dollars Let's
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dive into the world of Bitcoin mining
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dive into the world of Bitcoin mining
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dive into the world of Bitcoin mining
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taxes where understanding the rules
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taxes where understanding the rules
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taxes where understanding the rules
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doesn't just keep you compliant it can
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doesn't just keep you compliant it can
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doesn't just keep you compliant it can
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dramatically boost your bottom line
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dramatically boost your bottom line
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dramatically boost your bottom line
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Quick but important disclaimer I am not
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Quick but important disclaimer I am not
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Quick but important disclaimer I am not
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a tax professional This video is for
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a tax professional This video is for
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a tax professional This video is for
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educational purposes only Always consult
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educational purposes only Always consult
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educational purposes only Always consult
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with a qualified tax adviser before
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with a qualified tax adviser before
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with a qualified tax adviser before
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implementing any tax strategies Your
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implementing any tax strategies Your
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implementing any tax strategies Your
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situation may differ Now let's dive into
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situation may differ Now let's dive into
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situation may differ Now let's dive into
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how mining taxes actually work Let's
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how mining taxes actually work Let's
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how mining taxes actually work Let's
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start with the basics of how mining is
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start with the basics of how mining is
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start with the basics of how mining is
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taxed because this framework is the
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taxed because this framework is the
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taxed because this framework is the
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foundation for all advantages that I'll
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foundation for all advantages that I'll
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foundation for all advantages that I'll
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show you later When you mine Bitcoin the
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show you later When you mine Bitcoin the
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show you later When you mine Bitcoin the
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IRS views this activity in one of two
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IRS views this activity in one of two
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IRS views this activity in one of two
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ways Either as a hobby or as a business
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ways Either as a hobby or as a business
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ways Either as a hobby or as a business
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This distinction is absolutely crucial
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This distinction is absolutely crucial
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This distinction is absolutely crucial
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for your tax situation If your mining is
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for your tax situation If your mining is
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for your tax situation If your mining is
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classified as a hobby you'll still owe
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classified as a hobby you'll still owe
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classified as a hobby you'll still owe
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taxes on every coin that you mine at its
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taxes on every coin that you mine at its
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taxes on every coin that you mine at its
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fair market value when received But
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fair market value when received But
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fair market value when received But
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here's the problem Since the 2018 tax
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here's the problem Since the 2018 tax
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here's the problem Since the 2018 tax
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law changes hobby expenses are
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law changes hobby expenses are
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law changes hobby expenses are
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essentially non-deductible for most
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essentially non-deductible for most
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essentially non-deductible for most
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people However when your mining
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people However when your mining
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people However when your mining
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qualifies as a business everything
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qualifies as a business everything
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qualifies as a business everything
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changes You still report the fair market
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changes You still report the fair market
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changes You still report the fair market
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value of mined coins as income but now
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value of mined coins as income but now
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value of mined coins as income but now
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you can deduct all of your legitimate
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you can deduct all of your legitimate
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you can deduct all of your legitimate
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business expenses electricity equipment
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business expenses electricity equipment
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business expenses electricity equipment
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repairs space rental internet cooling
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repairs space rental internet cooling
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repairs space rental internet cooling
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costs and more The IRS looks at several
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costs and more The IRS looks at several
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costs and more The IRS looks at several
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factors to determine if you're a
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factors to determine if you're a
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factors to determine if you're a
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business Do you maintain complete
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business Do you maintain complete
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business Do you maintain complete
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records are you mining with the
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records are you mining with the
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records are you mining with the
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intention of making a profit do you put
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intention of making a profit do you put
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intention of making a profit do you put
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significant time and effort into it have
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significant time and effort into it have
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significant time and effort into it have
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you made changes to improve
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you made changes to improve
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you made changes to improve
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profitability most dedicated miners
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profitability most dedicated miners
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profitability most dedicated miners
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easily qualify as businesses once they
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easily qualify as businesses once they
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easily qualify as businesses once they
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understand these requirements and that's
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understand these requirements and that's
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understand these requirements and that's
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when the real tax advantages begin to
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when the real tax advantages begin to
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when the real tax advantages begin to
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emerge Here's where mining as a business
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emerge Here's where mining as a business
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emerge Here's where mining as a business
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really shines Let me walk you through
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really shines Let me walk you through
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really shines Let me walk you through
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the key tax advantages that Bitcoin
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the key tax advantages that Bitcoin
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the key tax advantages that Bitcoin
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miners can leverage The first major
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miners can leverage The first major
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miners can leverage The first major
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advantage is business expense deductions
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advantage is business expense deductions
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advantage is business expense deductions
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Nearly everything that you spend on
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Nearly everything that you spend on
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Nearly everything that you spend on
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mining becomes deductible substantially
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mining becomes deductible substantially
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mining becomes deductible substantially
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reducing your taxable income Let me show
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reducing your taxable income Let me show
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reducing your taxable income Let me show
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you how powerful this is with a real
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you how powerful this is with a real
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you how powerful this is with a real
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example One of my clients mines Bitcoin
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example One of my clients mines Bitcoin
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example One of my clients mines Bitcoin
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as a business and generated about $1.2
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as a business and generated about $1.2
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as a business and generated about $1.2
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million worth of Bitcoin last year
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million worth of Bitcoin last year
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million worth of Bitcoin last year
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without any deductions That's $1.2
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without any deductions That's $1.2
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without any deductions That's $1.2
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million of taxable income But as a
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million of taxable income But as a
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million of taxable income But as a
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mining business he deducted $570,000 in
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mining business he deducted $570,000 in
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mining business he deducted $570,000 in
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electricity costs $350,000 in equipment
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electricity costs $350,000 in equipment
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electricity costs $350,000 in equipment
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depreciation $120,000 for facility
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depreciation $120,000 for facility
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depreciation $120,000 for facility
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rental $50,000 for networking and
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rental $50,000 for networking and
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rental $50,000 for networking and
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cooling systems and $60,000 for repairs
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cooling systems and $60,000 for repairs
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cooling systems and $60,000 for repairs
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and maintenance That's 1.15 million in
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and maintenance That's 1.15 million in
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and maintenance That's 1.15 million in
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legitimate deductions reducing his
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legitimate deductions reducing his
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legitimate deductions reducing his
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taxable mining income to just
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taxable mining income to just
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taxable mining income to just
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$50,000 in a business where he cleared
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$50,000 in a business where he cleared
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$50,000 in a business where he cleared
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$440,000 in Bitcoin The tax savings were
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$440,000 in Bitcoin The tax savings were
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$440,000 in Bitcoin The tax savings were
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enormous which means he gets to hold on
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enormous which means he gets to hold on
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enormous which means he gets to hold on
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to more coins But the advantages don't
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to more coins But the advantages don't
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to more coins But the advantages don't
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stop there When you later sell those
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stop there When you later sell those
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stop there When you later sell those
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mine coins after holding them for over a
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mine coins after holding them for over a
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mine coins after holding them for over a
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year you qualify for long-term capital
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year you qualify for long-term capital
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year you qualify for long-term capital
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gains rates These rates range from zero
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gains rates These rates range from zero
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gains rates These rates range from zero
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up to 20% depending on your income which
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up to 20% depending on your income which
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up to 20% depending on your income which
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is much lower than the ordinary income
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is much lower than the ordinary income
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is much lower than the ordinary income
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tax rates up to 37% This creates a
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tax rates up to 37% This creates a
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tax rates up to 37% This creates a
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powerful two-step tax strategy You
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powerful two-step tax strategy You
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powerful two-step tax strategy You
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deduct most of your expenses against
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deduct most of your expenses against
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deduct most of your expenses against
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ordinary income when mining and then you
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ordinary income when mining and then you
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ordinary income when mining and then you
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pay lower capital gains rates when
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pay lower capital gains rates when
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pay lower capital gains rates when
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eventually selling Or if you're like
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eventually selling Or if you're like
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eventually selling Or if you're like
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most hardcore Bitcoiners you can choose
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most hardcore Bitcoiners you can choose
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most hardcore Bitcoiners you can choose
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to never sell and thus never be taxed on
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to never sell and thus never be taxed on
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to never sell and thus never be taxed on
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the gain and instead borrow against your
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the gain and instead borrow against your
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the gain and instead borrow against your
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holdings to get cash without any tax
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holdings to get cash without any tax
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holdings to get cash without any tax
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penalty It's completely legal and it's
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penalty It's completely legal and it's
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penalty It's completely legal and it's
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one of the most efficient tax structures
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one of the most efficient tax structures
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one of the most efficient tax structures
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that's available to small business
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that's available to small business
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that's available to small business
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owners today Now let's explore some more
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owners today Now let's explore some more
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owners today Now let's explore some more
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advanced strategies that can take your
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advanced strategies that can take your
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advanced strategies that can take your
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mining tax situation to the next level
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mining tax situation to the next level
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mining tax situation to the next level
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Section 179 expensing is a gamecher for
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Section 179 expensing is a gamecher for
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Section 179 expensing is a gamecher for
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professional miners Instead of
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professional miners Instead of
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professional miners Instead of
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depreciating your mining equipment over
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depreciating your mining equipment over
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depreciating your mining equipment over
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5 years this provision lets you deduct
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5 years this provision lets you deduct
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5 years this provision lets you deduct
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the full cost in year 1 up to 1.25
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the full cost in year 1 up to 1.25
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the full cost in year 1 up to 1.25
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million in 2025 if mining is your
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million in 2025 if mining is your
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million in 2025 if mining is your
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primary business activity This means
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primary business activity This means
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primary business activity This means
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that you can write off those expensive
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that you can write off those expensive
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that you can write off those expensive
|
|
ASIC miners immediately For example if
|
|
|
|
ASIC miners immediately For example if
|
|
|
|
|
|
ASIC miners immediately For example if
|
|
you invest $200,000 in mining equipment
|
|
|
|
you invest $200,000 in mining equipment
|
|
|
|
|
|
you invest $200,000 in mining equipment
|
|
you could potentially deduct the entire
|
|
|
|
you could potentially deduct the entire
|
|
|
|
|
|
you could potentially deduct the entire
|
|
amount in the first year rather than
|
|
|
|
amount in the first year rather than
|
|
|
|
|
|
amount in the first year rather than
|
|
spreading it out over 5 years This
|
|
|
|
spreading it out over 5 years This
|
|
|
|
|
|
spreading it out over 5 years This
|
|
matching of expenses with income is
|
|
|
|
matching of expenses with income is
|
|
|
|
|
|
matching of expenses with income is
|
|
especially valuable in the volatile
|
|
|
|
especially valuable in the volatile
|
|
|
|
|
|
especially valuable in the volatile
|
|
world of cryptocurrency Even better if
|
|
|
|
world of cryptocurrency Even better if
|
|
|
|
|
|
world of cryptocurrency Even better if
|
|
you're able to get financing on your
|
|
|
|
you're able to get financing on your
|
|
|
|
|
|
you're able to get financing on your
|
|
equipment you may be able to offset more
|
|
|
|
equipment you may be able to offset more
|
|
|
|
|
|
equipment you may be able to offset more
|
|
money on your tax bill than you actually
|
|
|
|
money on your tax bill than you actually
|
|
|
|
|
|
money on your tax bill than you actually
|
|
spend out of pocket to get it This is an
|
|
|
|
spend out of pocket to get it This is an
|
|
|
|
|
|
spend out of pocket to get it This is an
|
|
advanced strategy that high net worth
|
|
|
|
advanced strategy that high net worth
|
|
|
|
|
|
advanced strategy that high net worth
|
|
investors use frequently but is not
|
|
|
|
investors use frequently but is not
|
|
|
|
|
|
investors use frequently but is not
|
|
commonly understood Business structure
|
|
|
|
commonly understood Business structure
|
|
|
|
|
|
commonly understood Business structure
|
|
also matters tremendously Many minors
|
|
|
|
also matters tremendously Many minors
|
|
|
|
|
|
also matters tremendously Many minors
|
|
start as sole proprietors but eventually
|
|
|
|
start as sole proprietors but eventually
|
|
|
|
|
|
start as sole proprietors but eventually
|
|
benefit from forming an S corporation
|
|
|
|
benefit from forming an S corporation
|
|
|
|
|
|
benefit from forming an S corporation
|
|
Why with an S corp you can pay yourself
|
|
|
|
Why with an S corp you can pay yourself
|
|
|
|
|
|
Why with an S corp you can pay yourself
|
|
a reasonable salary and take the rest as
|
|
|
|
a reasonable salary and take the rest as
|
|
|
|
|
|
a reasonable salary and take the rest as
|
|
distributions that aren't subject to
|
|
|
|
distributions that aren't subject to
|
|
|
|
|
|
distributions that aren't subject to
|
|
self-employment tax This can save you
|
|
|
|
self-employment tax This can save you
|
|
|
|
|
|
self-employment tax This can save you
|
|
approximately
|
|
|
|
approximately
|
|
|
|
|
|
approximately
|
|
15.3% on a huge portion of your income
|
|
|
|
15.3% on a huge portion of your income
|
|
|
|
|
|
15.3% on a huge portion of your income
|
|
Entity type and timing is also crucial
|
|
|
|
Entity type and timing is also crucial
|
|
|
|
|
|
Entity type and timing is also crucial
|
|
If Bitcoin's price is down when you mine
|
|
|
|
If Bitcoin's price is down when you mine
|
|
|
|
|
|
If Bitcoin's price is down when you mine
|
|
it but you expect it to rise an entity
|
|
|
|
it but you expect it to rise an entity
|
|
|
|
|
|
it but you expect it to rise an entity
|
|
that allows for pass through taxation
|
|
|
|
that allows for pass through taxation
|
|
|
|
|
|
that allows for pass through taxation
|
|
could be advantageous This lets you
|
|
|
|
could be advantageous This lets you
|
|
|
|
|
|
could be advantageous This lets you
|
|
claim the business deductions
|
|
|
|
claim the business deductions
|
|
|
|
|
|
claim the business deductions
|
|
immediately while potentially paying
|
|
|
|
immediately while potentially paying
|
|
|
|
|
|
immediately while potentially paying
|
|
lower capital gains taxes later For
|
|
|
|
lower capital gains taxes later For
|
|
|
|
|
|
lower capital gains taxes later For
|
|
miners with significant operations you
|
|
|
|
miners with significant operations you
|
|
|
|
|
|
miners with significant operations you
|
|
should also consider exploring
|
|
|
|
should also consider exploring
|
|
|
|
|
|
should also consider exploring
|
|
opportunity zone investments If you
|
|
|
|
opportunity zone investments If you
|
|
|
|
|
|
opportunity zone investments If you
|
|
establish mining operations in
|
|
|
|
establish mining operations in
|
|
|
|
|
|
establish mining operations in
|
|
designated opportunity zones you can
|
|
|
|
designated opportunity zones you can
|
|
|
|
|
|
designated opportunity zones you can
|
|
defer and potentially reduce your
|
|
|
|
defer and potentially reduce your
|
|
|
|
|
|
defer and potentially reduce your
|
|
capital gains taxes And I've seen miners
|
|
|
|
capital gains taxes And I've seen miners
|
|
|
|
|
|
capital gains taxes And I've seen miners
|
|
relocate operations to these zones
|
|
|
|
relocate operations to these zones
|
|
|
|
|
|
relocate operations to these zones
|
|
specifically for the tax benefits One
|
|
|
|
specifically for the tax benefits One
|
|
|
|
|
|
specifically for the tax benefits One
|
|
fascinating area where Bitcoin mining
|
|
|
|
fascinating area where Bitcoin mining
|
|
|
|
|
|
fascinating area where Bitcoin mining
|
|
stands out is at the intersection of
|
|
|
|
stands out is at the intersection of
|
|
|
|
|
|
stands out is at the intersection of
|
|
energy use and tax incentives Contrary
|
|
|
|
energy use and tax incentives Contrary
|
|
|
|
|
|
energy use and tax incentives Contrary
|
|
to popular belief Bitcoin mining can
|
|
|
|
to popular belief Bitcoin mining can
|
|
|
|
|
|
to popular belief Bitcoin mining can
|
|
actually support environmental goals and
|
|
|
|
actually support environmental goals and
|
|
|
|
|
|
actually support environmental goals and
|
|
unlock additional tax benefits in the
|
|
|
|
unlock additional tax benefits in the
|
|
|
|
|
|
unlock additional tax benefits in the
|
|
process Miners using renewable energy
|
|
|
|
process Miners using renewable energy
|
|
|
|
|
|
process Miners using renewable energy
|
|
sources like solar wind or hydropower
|
|
|
|
sources like solar wind or hydropower
|
|
|
|
|
|
sources like solar wind or hydropower
|
|
may qualify for various energy tax
|
|
|
|
may qualify for various energy tax
|
|
|
|
|
|
may qualify for various energy tax
|
|
credits The federal investment tax
|
|
|
|
credits The federal investment tax
|
|
|
|
|
|
credits The federal investment tax
|
|
credit can offset up to 30% of the cost
|
|
|
|
credit can offset up to 30% of the cost
|
|
|
|
|
|
credit can offset up to 30% of the cost
|
|
of installing renewable energy systems
|
|
|
|
of installing renewable energy systems
|
|
|
|
|
|
of installing renewable energy systems
|
|
to power your mining operation There are
|
|
|
|
to power your mining operation There are
|
|
|
|
|
|
to power your mining operation There are
|
|
miners in Texas who partnered with the
|
|
|
|
miners in Texas who partnered with the
|
|
|
|
|
|
miners in Texas who partnered with the
|
|
wind farm to utilize excess capacity
|
|
|
|
wind farm to utilize excess capacity
|
|
|
|
|
|
wind farm to utilize excess capacity
|
|
during off- peak hours Not only did they
|
|
|
|
during off- peak hours Not only did they
|
|
|
|
|
|
during off- peak hours Not only did they
|
|
secure discounted electricity but they
|
|
|
|
secure discounted electricity but they
|
|
|
|
|
|
secure discounted electricity but they
|
|
qualified for substantial energy credits
|
|
|
|
qualified for substantial energy credits
|
|
|
|
|
|
qualified for substantial energy credits
|
|
creating another layer of tax advantages
|
|
|
|
creating another layer of tax advantages
|
|
|
|
|
|
creating another layer of tax advantages
|
|
Natural gas flaring provides another
|
|
|
|
Natural gas flaring provides another
|
|
|
|
|
|
Natural gas flaring provides another
|
|
opportunity In oil fields as well as
|
|
|
|
opportunity In oil fields as well as
|
|
|
|
|
|
opportunity In oil fields as well as
|
|
landfills excess natural gas is often
|
|
|
|
landfills excess natural gas is often
|
|
|
|
|
|
landfills excess natural gas is often
|
|
burned off or flared as waste or it's
|
|
|
|
burned off or flared as waste or it's
|
|
|
|
|
|
burned off or flared as waste or it's
|
|
even released into the atmosphere
|
|
|
|
even released into the atmosphere
|
|
|
|
|
|
even released into the atmosphere
|
|
completely untouched Miners who capture
|
|
|
|
completely untouched Miners who capture
|
|
|
|
|
|
completely untouched Miners who capture
|
|
this otherwise wasted energy to power
|
|
|
|
this otherwise wasted energy to power
|
|
|
|
|
|
this otherwise wasted energy to power
|
|
their operations can potentially qualify
|
|
|
|
their operations can potentially qualify
|
|
|
|
|
|
their operations can potentially qualify
|
|
for carbon capture credits while
|
|
|
|
for carbon capture credits while
|
|
|
|
|
|
for carbon capture credits while
|
|
securing extremely lowcost energy Heat
|
|
|
|
securing extremely lowcost energy Heat
|
|
|
|
|
|
securing extremely lowcost energy Heat
|
|
recycling is emerging as another
|
|
|
|
recycling is emerging as another
|
|
|
|
|
|
recycling is emerging as another
|
|
innovative area Miners who capture and
|
|
|
|
innovative area Miners who capture and
|
|
|
|
|
|
innovative area Miners who capture and
|
|
repurpose the heat generated by their
|
|
|
|
repurpose the heat generated by their
|
|
|
|
|
|
repurpose the heat generated by their
|
|
operations for example to heat buildings
|
|
|
|
operations for example to heat buildings
|
|
|
|
|
|
operations for example to heat buildings
|
|
or for agricultural purposes like
|
|
|
|
or for agricultural purposes like
|
|
|
|
|
|
or for agricultural purposes like
|
|
greenhouse warming may qualify for
|
|
|
|
greenhouse warming may qualify for
|
|
|
|
|
|
greenhouse warming may qualify for
|
|
additional efficiency related tax
|
|
|
|
additional efficiency related tax
|
|
|
|
|
|
additional efficiency related tax
|
|
incentives The key here is understanding
|
|
|
|
incentives The key here is understanding
|
|
|
|
|
|
incentives The key here is understanding
|
|
that mining's energyintensive nature
|
|
|
|
that mining's energyintensive nature
|
|
|
|
|
|
that mining's energyintensive nature
|
|
when it's approached thoughtfully can
|
|
|
|
when it's approached thoughtfully can
|
|
|
|
|
|
when it's approached thoughtfully can
|
|
align with both environmental goals and
|
|
|
|
align with both environmental goals and
|
|
|
|
|
|
align with both environmental goals and
|
|
tax incentives creating additional
|
|
|
|
tax incentives creating additional
|
|
|
|
|
|
tax incentives creating additional
|
|
avenues for tax savings that most miners
|
|
|
|
avenues for tax savings that most miners
|
|
|
|
|
|
avenues for tax savings that most miners
|
|
overlook While the tax advantages of
|
|
|
|
overlook While the tax advantages of
|
|
|
|
|
|
overlook While the tax advantages of
|
|
mining are substantial there are several
|
|
|
|
mining are substantial there are several
|
|
|
|
|
|
mining are substantial there are several
|
|
critical pitfalls that you need to avoid
|
|
|
|
critical pitfalls that you need to avoid
|
|
|
|
|
|
critical pitfalls that you need to avoid
|
|
The biggest mistake that I see miners
|
|
|
|
The biggest mistake that I see miners
|
|
|
|
|
|
The biggest mistake that I see miners
|
|
make is poor recordkeeping The IRS
|
|
|
|
make is poor recordkeeping The IRS
|
|
|
|
|
|
make is poor recordkeeping The IRS
|
|
requires you to record the fair market
|
|
|
|
requires you to record the fair market
|
|
|
|
|
|
requires you to record the fair market
|
|
value of each Bitcoin received through
|
|
|
|
value of each Bitcoin received through
|
|
|
|
|
|
value of each Bitcoin received through
|
|
mining at the time that it was received
|
|
|
|
mining at the time that it was received
|
|
|
|
|
|
mining at the time that it was received
|
|
Without this documentation you could
|
|
|
|
Without this documentation you could
|
|
|
|
|
|
Without this documentation you could
|
|
face significant issues during an audit
|
|
|
|
face significant issues during an audit
|
|
|
|
|
|
face significant issues during an audit
|
|
You can use your mining pool reports
|
|
|
|
You can use your mining pool reports
|
|
|
|
|
|
You can use your mining pool reports
|
|
blockchain explorers and cryptocurrency
|
|
|
|
blockchain explorers and cryptocurrency
|
|
|
|
|
|
blockchain explorers and cryptocurrency
|
|
tax software to maintain accurate
|
|
|
|
tax software to maintain accurate
|
|
|
|
|
|
tax software to maintain accurate
|
|
records screenshot or download price
|
|
|
|
records screenshot or download price
|
|
|
|
|
|
records screenshot or download price
|
|
data on mining days as additional backup
|
|
|
|
data on mining days as additional backup
|
|
|
|
|
|
data on mining days as additional backup
|
|
And remember the burden of proof is on
|
|
|
|
And remember the burden of proof is on
|
|
|
|
|
|
And remember the burden of proof is on
|
|
you as the taxpayer Another common
|
|
|
|
you as the taxpayer Another common
|
|
|
|
|
|
you as the taxpayer Another common
|
|
mistake is comingling personal and
|
|
|
|
mistake is comingling personal and
|
|
|
|
|
|
mistake is comingling personal and
|
|
business funds Maintain separate wallets
|
|
|
|
business funds Maintain separate wallets
|
|
|
|
|
|
business funds Maintain separate wallets
|
|
and accounts for your mining business
|
|
|
|
and accounts for your mining business
|
|
|
|
|
|
and accounts for your mining business
|
|
Not only does this strengthen your case
|
|
|
|
Not only does this strengthen your case
|
|
|
|
|
|
Not only does this strengthen your case
|
|
that you're running a legitimate
|
|
|
|
that you're running a legitimate
|
|
|
|
|
|
that you're running a legitimate
|
|
business but it also makes accounting
|
|
|
|
business but it also makes accounting
|
|
|
|
|
|
business but it also makes accounting
|
|
dramatically easier Mclassifying mining
|
|
|
|
dramatically easier Mclassifying mining
|
|
|
|
|
|
dramatically easier Mclassifying mining
|
|
status is another pitfall Some miners
|
|
|
|
status is another pitfall Some miners
|
|
|
|
|
|
status is another pitfall Some miners
|
|
incorrectly treat their activities as
|
|
|
|
incorrectly treat their activities as
|
|
|
|
|
|
incorrectly treat their activities as
|
|
investments rather than business income
|
|
|
|
investments rather than business income
|
|
|
|
|
|
investments rather than business income
|
|
You see mining generates ordinary income
|
|
|
|
You see mining generates ordinary income
|
|
|
|
|
|
You see mining generates ordinary income
|
|
when the coins are received Treating it
|
|
|
|
when the coins are received Treating it
|
|
|
|
|
|
when the coins are received Treating it
|
|
otherwise can trigger IRS scrutiny
|
|
|
|
otherwise can trigger IRS scrutiny
|
|
|
|
|
|
otherwise can trigger IRS scrutiny
|
|
Finally be wary of the hobby loss rules
|
|
|
|
Finally be wary of the hobby loss rules
|
|
|
|
|
|
Finally be wary of the hobby loss rules
|
|
If your mining operation shows losses
|
|
|
|
If your mining operation shows losses
|
|
|
|
|
|
If your mining operation shows losses
|
|
for several years the IRS may reclassify
|
|
|
|
for several years the IRS may reclassify
|
|
|
|
|
|
for several years the IRS may reclassify
|
|
it as a hobby disallowing your
|
|
|
|
it as a hobby disallowing your
|
|
|
|
|
|
it as a hobby disallowing your
|
|
deductions To prevent this document your
|
|
|
|
deductions To prevent this document your
|
|
|
|
|
|
deductions To prevent this document your
|
|
profit motive through business plans
|
|
|
|
profit motive through business plans
|
|
|
|
|
|
profit motive through business plans
|
|
operational improvements and eventually
|
|
|
|
operational improvements and eventually
|
|
|
|
|
|
operational improvements and eventually
|
|
profitability Looking toward the future
|
|
|
|
profitability Looking toward the future
|
|
|
|
|
|
profitability Looking toward the future
|
|
several trends could impact your Bitcoin
|
|
|
|
several trends could impact your Bitcoin
|
|
|
|
|
|
several trends could impact your Bitcoin
|
|
mining tax strategy First regulatory
|
|
|
|
mining tax strategy First regulatory
|
|
|
|
|
|
mining tax strategy First regulatory
|
|
clarity is improving The IRS is
|
|
|
|
clarity is improving The IRS is
|
|
|
|
|
|
clarity is improving The IRS is
|
|
providing more guidance specifically
|
|
|
|
providing more guidance specifically
|
|
|
|
|
|
providing more guidance specifically
|
|
addressing cryptocurrency activities
|
|
|
|
addressing cryptocurrency activities
|
|
|
|
|
|
addressing cryptocurrency activities
|
|
including mining While the fundamental
|
|
|
|
including mining While the fundamental
|
|
|
|
|
|
including mining While the fundamental
|
|
tax principles remain constant expect
|
|
|
|
tax principles remain constant expect
|
|
|
|
|
|
tax principles remain constant expect
|
|
more detailed guidelines in the coming
|
|
|
|
more detailed guidelines in the coming
|
|
|
|
|
|
more detailed guidelines in the coming
|
|
years Second entity structures continue
|
|
|
|
years Second entity structures continue
|
|
|
|
|
|
years Second entity structures continue
|
|
to evolve We're seeing increasing
|
|
|
|
to evolve We're seeing increasing
|
|
|
|
|
|
to evolve We're seeing increasing
|
|
interest in mining cooperatives and
|
|
|
|
interest in mining cooperatives and
|
|
|
|
|
|
interest in mining cooperatives and
|
|
partnerships that allow for more
|
|
|
|
partnerships that allow for more
|
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partnerships that allow for more
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flexible tax treatment These structures
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flexible tax treatment These structures
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flexible tax treatment These structures
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can distribute tax benefits more
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can distribute tax benefits more
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can distribute tax benefits more
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efficiently among their participants And
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efficiently among their participants And
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efficiently among their participants And
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third jurisdictional considerations are
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third jurisdictional considerations are
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third jurisdictional considerations are
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becoming more important States like
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becoming more important States like
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becoming more important States like
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Texas and Wyoming are creating mining
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Texas and Wyoming are creating mining
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Texas and Wyoming are creating mining
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friendly policies including energy
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friendly policies including energy
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friendly policies including energy
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incentives and favorable tax treatment
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incentives and favorable tax treatment
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incentives and favorable tax treatment
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Strategic relocation could become part
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Strategic relocation could become part
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Strategic relocation could become part
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of your long-term tax planning And as
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of your long-term tax planning And as
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of your long-term tax planning And as
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one client recently told me after
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one client recently told me after
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one client recently told me after
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implementing these strategies I knew
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implementing these strategies I knew
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implementing these strategies I knew
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mining would be profitable from a
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mining would be profitable from a
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mining would be profitable from a
|
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Bitcoin accumulation perspective but I
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Bitcoin accumulation perspective but I
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Bitcoin accumulation perspective but I
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never realized the tax benefits would
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never realized the tax benefits would
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never realized the tax benefits would
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actually double my effective return and
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actually double my effective return and
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actually double my effective return and
|
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operate like a turnkey business The tax
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operate like a turnkey business The tax
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operate like a turnkey business The tax
|
|
advantages of Bitcoin mining as a
|
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advantages of Bitcoin mining as a
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advantages of Bitcoin mining as a
|
|
business represent one of the most
|
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business represent one of the most
|
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business represent one of the most
|
|
overlooked aspects of the cryptocurrency
|
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|
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overlooked aspects of the cryptocurrency
|
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overlooked aspects of the cryptocurrency
|
|
space broadly When structured properly
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space broadly When structured properly
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space broadly When structured properly
|
|
mining offers a powerful combination of
|
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mining offers a powerful combination of
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mining offers a powerful combination of
|
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business deductions favorable capital
|
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business deductions favorable capital
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business deductions favorable capital
|
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gains treatment and specialized tax
|
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gains treatment and specialized tax
|
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gains treatment and specialized tax
|
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incentives that few other business
|
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incentives that few other business
|
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incentives that few other business
|
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models can match The key is approaching
|
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models can match The key is approaching
|
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models can match The key is approaching
|
|
mining deliberately with proper
|
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mining deliberately with proper
|
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mining deliberately with proper
|
|
documentation clear business practices
|
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documentation clear business practices
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documentation clear business practices
|
|
and strategic planning The difference
|
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|
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and strategic planning The difference
|
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|
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and strategic planning The difference
|
|
between treating mining as a casual
|
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|
|
between treating mining as a casual
|
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between treating mining as a casual
|
|
hobby versus a structured business can
|
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|
|
hobby versus a structured business can
|
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|
|
hobby versus a structured business can
|
|
literally mean tens or even hundreds of
|
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|
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literally mean tens or even hundreds of
|
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|
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|
|
literally mean tens or even hundreds of
|
|
thousands of dollars in tax savings And
|
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|
|
thousands of dollars in tax savings And
|
|
|
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|
|
thousands of dollars in tax savings And
|
|
working with the right mining partner
|
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|
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working with the right mining partner
|
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working with the right mining partner
|
|
from the start can put these action
|
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from the start can put these action
|
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from the start can put these action
|
|
items on easy street Remember Dean from
|
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|
items on easy street Remember Dean from
|
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|
items on easy street Remember Dean from
|
|
the beginning of the video his
|
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the beginning of the video his
|
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|
|
|
|
the beginning of the video his
|
|
$350,000 tax savings didn't happen by
|
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|
|
$350,000 tax savings didn't happen by
|
|
|
|
|
|
$350,000 tax savings didn't happen by
|
|
accident It came from understanding and
|
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|
|
accident It came from understanding and
|
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|
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|
|
accident It came from understanding and
|
|
applying these simple principles
|
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|
|
applying these simple principles
|
|
|
|
|
|
applying these simple principles
|
|
systematically If you're serious about
|
|
|
|
systematically If you're serious about
|
|
|
|
|
|
systematically If you're serious about
|
|
mining consider consulting with a tax
|
|
|
|
mining consider consulting with a tax
|
|
|
|
|
|
mining consider consulting with a tax
|
|
professional who understands the
|
|
|
|
professional who understands the
|
|
|
|
|
|
professional who understands the
|
|
cryptocurrency markets The investment in
|
|
|
|
cryptocurrency markets The investment in
|
|
|
|
|
|
cryptocurrency markets The investment in
|
|
proper tax planning almost always pays
|
|
|
|
proper tax planning almost always pays
|
|
|
|
|
|
proper tax planning almost always pays
|
|
for itself many times over Thanks for
|
|
|
|
for itself many times over Thanks for
|
|
|
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|
|
for itself many times over Thanks for
|
|
watching If you found this helpful hit
|
|
|
|
watching If you found this helpful hit
|
|
|
|
|
|
watching If you found this helpful hit
|
|
like and subscribe for more Bitcoin
|
|
|
|
like and subscribe for more Bitcoin
|
|
|
|
|
|
like and subscribe for more Bitcoin
|
|
content and drop your questions in the
|
|
|
|
content and drop your questions in the
|
|
|
|
|
|
content and drop your questions in the
|
|
comments below and I'll do my best to
|
|
|
|
comments below and I'll do my best to
|
|
|
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|
|
comments below and I'll do my best to
|
|
address them in a future
|
|
|