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Mining as a Business

Discussion in 'Blockchain & Cryptocurrency Mining' started by IncredibleBulk, Feb 4, 2018.

  1. OP
    OP
    IncredibleBulk

    IncredibleBulk Member

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    Yeah it's similar to cash in hand tradies. The ATO doesn't have to prove how much you earnt, they just have to show that you did earn something you didn't claim. They will "make a determination" and hit you with a fine based on what they think you've done. In some cases that may actually be higher then what you earnt
     
  2. OP
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    IncredibleBulk

    IncredibleBulk Member

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    Question for you guys..... this is more a generic business question I guess. Say I buy something now and then use it 100% for the business in a couple of months, can it be used for business deductions? Or would I have to "sell" it to the business.. which is basically just pushing paper around to achieve the same thing
     
  3. koss

    koss Member

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    It's sounds like you are asking for financial advice, ask an accountant or ring the ATO.
     
  4. OP
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    IncredibleBulk

    IncredibleBulk Member

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    I'm seeing my accountant tomorrow night actually. Was just throwing it out there :)
     
  5. OP
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    IncredibleBulk

    IncredibleBulk Member

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    So... had a chat with my accountant and he's basically taken my numbers (all speculative) and said that there's not much point registering as a company at this point. The difference between personal tax and company tax would be chewed up in the regulatory costs of maintaining the business.

    However I could still do it as a sole trader and be able to make the most of the instant tax deduction (under 20k)
     
  6. NerfDude

    NerfDude Member

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    Does setting it up as a sole trader allow you to offset tax paid from another job ? Would be great if you could post the benefits/drawbacks of this approach with some dummy figures (obviously not looking for financial advice here just curious)
     
  7. koss

    koss Member

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    You don't set up as a sole trader, you simply are a sole trader everyone that trades is. It's only a term that's important to having an ABN number, however if all you are doing is mining then you really don't have any clients that will ask for an ABN, in fact you are not really a trader at all, a trader needs clients with which to trade.
     
  8. Dingarth

    Dingarth Member

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  9. Myne_h

    Myne_h Member

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    Curious what the numbers were.
    How much is registration, compliance and all that?
     
  10. OP
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    IncredibleBulk

    IncredibleBulk Member

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    I won't give out exact numbers but unless I had over 20k to invest in equipment up front, my returns after covering company costs would be negligible. And you also run the risk of getting "please explain" questions about how you're making such a massive loss (ie, making sure it's not a scam etc etc). At that sort of expense, I'd want to see a ROI alot more than I would if I was just doing it for myself

    I'm still considering buying gear and starting up (because I'm a geek and I enjoy tinkering) but will be claiming anything I can as personal income and deductions. I could just "do it dodgy" and not declare anything, but I'm not willing to take that risk of being stung at some point down the track. Who knows... if I play my cards right and turn it into something down the track, at least I've got an idea of what to do then

    My personal situation wouldn't be the same as alot of you guys, so please don't take my example as gospel. I'd advise getting advice yourself as every situation is different
     
    shredder likes this.
  11. Myne_h

    Myne_h Member

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    Fair enough that you wouldn't disclose your personal investment or estimated ROI.

    Would you be willing to ballpark the fixed cost related purely to setting up and operating the business structure? (that would also apply if you were starting and running any business)
    Setup, registration, compliance etc?
     
  12. Dingarth

    Dingarth Member

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    Prices are approx for an accountant to prepare (some maybe more/less expensive)

    Company Setup approx $1000 one off
    Qtrly BAS - Accountant $200
    Yearly Tax, Financials for company say $1,500
    ASIC Fees $246 per year
     
  13. azzachaz

    azzachaz Member

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    This is all interesting for a tax office point of view.
    I understand the tax office would like you to declare any earning from crypto investments. It only stands to reason you could claim any expenses trying to earn those investments.
     
  14. OP
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    IncredibleBulk

    IncredibleBulk Member

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    "In this case, you can defer the loss until you make a profit from the business"

    Fully understand why it's the case, otherwise people would intentionally "lose money" through tax deductable items each year to bring down their "real" income
     
  15. AdamBullock

    AdamBullock New Member

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    The point to JUMBLR is you say you lost the private key. You just lost everything, whatever you had is no longer traceable. You haven't got it, problem solved.
     
  16. OP
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    IncredibleBulk

    IncredibleBulk Member

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    Untraceable until you want to actually utilise those funds at a later point. Get audited for whatever reason and they can ask "so... how'd you buy that car?" or "there are no bills or food showing in your bank records, how are you paying for those?". The burden of proof is on you... if they get a whiff that you're hiding income, they will just make an estimation and hit you with a bill (happened to a mate, cash in hand tradie and they estimated about double what he was actually getting)
     
  17. shredder

    shredder Member

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    That's fine, we'll just tax you for the time that you *did* have it.

    It's like if the cops had conclusive photos of you with stolen property. But by the time they get to you, you don't have it any more. You've been clever enough to get rid of it through an untraceable "jumblr" network, consisting of other people moving the stuff around so it can't be found. You don't have it, you shrug. You think you're all out of trouble, problem solved??

    I don't think the law follows that logic.

    Eventually, if these coin-tumbler things survive, they'll just end up putting legislation in place that will, in the absence of evidence, sting you double whatever they think you "might" have done - as per the tradie example above.

    It's a bit of a large topic for this thread, but I do feel that accountability is one of the largest areas of contention in crypto and adoption. For myself and my fellow citizens, I want (an appropriate degree of) privacy ( - whatever that may be - I don't claim to know), but also understand that history has spent hundreds of years putting in place vast complex systems of finance and law that will strongly resist change for a long time.
     
    Last edited: Feb 9, 2018
  18. koss

    koss Member

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    Love the way this thread is not about "Mining as a Business" it's basically a discussion about crypto tax and money laundering, without a mention about how you can mine crypto as a business. eg. what hardware you need how to setup, the people, premises, expenses etc.

     
    Last edited: Feb 9, 2018
  19. OP
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    IncredibleBulk

    IncredibleBulk Member

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    Wasn't the original intention of the thread though
     
  20. 426

    426 Member

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    OK so you need:

    Money to invest.
    A suitable room/building (depending on scale).
    Power (probably the second biggest limiting factor to scale, (money would be the biggest)).
    Ventilation (to keep the equipment as low temperature as possible and extend lifetime of said equipment).
    Internet (stable).
    Equipment to mine with.

    Once you're running though, what else is left other than making your operation more efficient.
    eg. Maximising profits by minimising expenses, tax being one of them?

    Perhaps for employees, you could hire your friends/relatives and pay them according to their existing personal income tax level, whatever it is that evens out your hires to all be at the same (lowest possible) level of personal income tax?
     

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