U.S. Clients of Compass mining can now mine bitcoin directly into a Choice Individual Retirement Account without triggering a taxable event, per a press release sent to Bitcoin Magazine.
Under the current tax laws, revenue from Bitcoin mining is taxed as income. Currently, miners must also pay capital gains taxes when they are forced to sell some of their bitcoin to cover other tax obligations.
Through mining in a Choice account, miners avoid taxes on their bitcoin revenue in the short term and potentially indefinitely, depending on which type of IRA they use.
In the statement sent to Bitcoin Magazine, Compass explained: “tax-efficient mining presents enormous benefits to retail miners and empowers them with another tool to mine even more profitably at a smaller scale.”
Choice is an independent, qualified custodian regulated by the South Dakota Division of Banking and an offering of Kingdom Trust Company. In May of 2020 Choice became the first retirement provider to offer a single account for all client retirement assets, physical or digital, legacy or traditional. The Choice platform currently hosts over 125,000 retirement accounts, with over $18 billion assets under custody.
Compass mining allows users to effectively mine without worrying about the logistics of mining through purchasing and renting machines that are then housed, maintained, and operated on the client’s behalf. It is the fastest growing marketplace for average investors to mine profitably at a wide range of scales. Retail miners are provided access to the same high-quality mining hardware and verified hosting facilities as large scale industrial competitors.
In July, Compass Mining reached over 450 petahash (PH) of hashrate across all its mining customers. The tax benefits of mining to a Choice IRA account are limited to retail miners who have purchased hardware through Compass. The mining payouts are then sent directly to the Choice account.
Ryan Radloff, CEO of Choice commented, “Being able to purchase a Compass miner within your IRA and mine bitcoin in a tax-advantaged account is an incredible opportunity. Our entire team is excited to work with Compass and as the industry continues to evolve.”