Quote from: Druiz287 on March 05, 2018, 05:25:03 AM

Bucc5207 makes a great point: profit does not mean cash.

....

So here are two scenarios:

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Equity of 4000 to start the business with 3600 for a mining rig (depreciated over a year):
100 a month in electricity
800 a month in profits from mining
300 a month in depreciation of the rig
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$700 cash in the company bank account monthly after paying electricity
Only $400 of that is taxable (after depreciation on your machine)

***

Debt of 4000 loan to start the business with 3600 for a mining rig (depreciated over a year):
100 a month in electricity
800 a month in profits from mining
300 a month to pay back the loan for the rig
300 a month in depreciation of the rig
_________________________________
$400 cash in the company bank account monthly after paying electricity
$300 back in your bank account after your loan being repaid
Only $100 of that is taxable (provided you didn't make interest on the loan)

Sorry to contradict after your kind vote of confidence. Both scenarios result in $400 of taxable income. You don't get a tax deduction for repaying principal on a loan. Unless the loan is interest-free, the debt scenario results both in lower net income and less cash.