• 176 Online
  • 23140 Members
  • 26887 Posts

ATO Community

Bitcoin Mining - Do I need an ABN and can I still claim depreciation on equipment if no profit

Ask a question

This post is archived and may not be up to date.

Highlighted

Newbie

Views 1348

Replies 7

Hi, Sorry for yet another crypto question but I'm struggling to get a definite answer on this.

 

I have a full time job, and bought a $1300 GPU in Jan 18 to bring in extra income and mined for 3 months.  It began as profitable then nose dived.  During this 3 months I made enough bittcoin to equal $270 at the time of withdrawal.  I transfered this through an exchange for AUD and used it to pay the electricity bill which it didn't even cover.   I've not mined since as I'm waiting until it becomes profitable again (if it ever does ).  The rest of the computer was from left over parts so no cost to build.  

 

Please can I get a definitive answer on : 

 

1: Am I right in saying  : 

Looking just at the Capital Gains event of the mining vs cost of running, my $270 CG profit is wiped out by the electricity cost, making my total Capital Gain $0 as I can't go into the negative  as I can't claim a CG loss against anything but CG profit.

 

2 : If this is correct, do I actually need to fill out the Capital Gains section given it's $0?

 

2 : Can I still claim depreciation on the $1300 GPU seperately against other income tax ?

 

3: Do I need an ABN to declare crypto mining as a business ?   May sound like a stupid question but there's nothing on any of the sites I read that mentions an ABN. 

 

Thanks

D

 

7 REPLIES 7

Devotee

Replies 2

check https://whattomine.com/ if you're losing money... it will tell you how much you'l generate and you should compare it against electricity costs before starting I guess. but yeah when everything dives, I guess it will take longer to pay off. 

I think I calculated that it would take a year to pay off a topline graphics card. but by then it will probably be a pancaked cooked for over a year.

Newbie

Replies 1

Yeah I wasn't worried about ROI on the GPU, more just that i was earning more than the electricity was costing.  When I started it was pretty good, but tanked soon after so overall after 3 months was a small loss.    Now just trying to work out how to detail it on the tax return, and if I can claim deprecitation on the GPU given it was bought for mining purposes, and if so does it count only against Capital Gains (of which I have 0) or can I claim it against other income tax.

 

Devotee

Replies 0

It is a great question, and I'd love to know the answer. I bought an office chair because over the Xmas holidays I was trading almost 24/7, trying to earn enough to afford school. But in the meantime until there is an official response I found this link:

https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Tools,-equipment-a...

It doesn't seem to exclusively apply to 'businesses', so maybe as a hobbyist you can still claim these things but I guess in the sense they are helping you setup your business in this regard, once you have a business and ABN then I guess you get treated more professionally with more concessions maybe? I'm not sure this is all new to me. I'm more lambomoon than I am teach a fish to man.

Taxicorn

Replies 3

 

It would appear that you qualify as a "Hobby Miner':

 

Rewarded coins are not income but rather a capital acquisition.

Cost of equipment is allocated as a cost of acquisition of the rewarded coins.

Running costs are also allocated as a cost of acquisition of the rewarded coins

On disposal of the rewarded coins, gains are 100% taxable if within 12 months of being acquired, otherwise 50% taxable where held for more than 12 months.

 

So you declare $270 as income and the graphics card and electricity cost etc as a cost of aquiring those coins (an expense).

 

You will therefore have a carry forward business loss to offset any future profits.

 

Yes you can start a business without an ABN. Its only compulsory if you hit the $75k mark and are then required to register for GST.

 

Having an ABN you can claim an immediate deduction for the graphics card, without an abn it would need to be depreciated. In your case it doesn't really matter long term as your future income from bit coin mining is unclear and uncertain.

 

 

 

Newbie

Replies 2

Thanks, just one last point to clarify.    Am I right in saying that :

Given the cost of electricity wipes out the capital gains, I can't really claim anything for the graphics card this year even against my other income ?

I could however carry it forward for any capital gains made next FY?

 

 

 

Taxicorn

Replies 1

How are you calculting th electricity used?

 

Newbie

Replies 0

Voltage meter attached to the PC, double checked by how much my elec bill jumped when I was mining then decreased again when I stopped.

Top Solution Authors