Quote from: ggbtctalk000 on January 09, 2018, 04:38:39 AM

i started mining now, I am planning to hold about 50% for long term and sell immediately the other half. I am expecting ST gain @ 39% for the ones that I sell immediately (assumption) and hoping that I can get taxed for LT gain for the ones I will hold over a year. Do you think that is possible?

#1 Assuming you're asking about US taxation, you're looking at the income from mining be taxed at your Ordinary tax rate (37% if Gross Income >$600,000 married or $500,000 single) at the time it is mined.

#2 If you hold a newly mined coin, then you have a new investment with a cost basis = #1 above. If you sell, trade, or exchange that within 12 months of mining it, you will pay ST capital gains (which is your ordinary tax rate) on the amount it has appreciated since it was mined. If you hold it 12 months, it qualifies for LT capital gains (which is either 0%, 15%, or 20% depending on which Ordinary tax bracket you're in). This is similar to how stock awards are taxed (ordinary at vesting, capital gain at sale).

#3 Often with proactive planning, there may be benefits to incorporating a mining activity. New 21% flat corporate rates would allow you to reinvest profits into the mining, but beware of the double taxation when you pay yourself. If there's sufficient activity to qualify as an active trade or business, a pass-through entity like a LLC might qualify for the 20% pass-through deduction. Mining can also be done in a self-directed retirement plan (IRA LLC or SD Solo 401k) to completely defer tax (or be tax free if Roth).

So I suggest working with a tax advisor who can help minimize your taxes from the beginning. Definitely worth their weight in gold.