Choice and Compass Mining unveil tax-free Bitcoin mining solution

IRA provider Choice and Compass Mining have rolled out a solution whereby clients can buy Bitcoin mining machines through individual retirement accounts (IRAs).

Why should we care?
Tax requirements associated with mined Bitcoin are a deterrent for many looking to get into that space. Under current tax rules, revenue from Bitcoin mining is subject to taxes, and miners also pay capital gains taxes when they sell Bitcoin to cover tax obligations. In effect, miners incur income tax when Bitcoin comes into possession, and a second taxable event is triggered when they sell a portion of their Bitcoin to cover tax requirements. Compass Mining was quoted as saying, “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 a custodian regulated by the South Dakota Division of Banking and owned by Kingdom Trust Company. The Choice platform powers more than 125,000 retirement accounts since its launch last year, with assets under custody of more than $18B. “At Compass Mining, our singular goal is to democratize Bitcoin mining by making it as simple and accessible as possible for everyone. The ability to add Bitcoin mining to your retirement plan is ground-breaking. Our entire team is thrilled to now offer tax-efficient mining options through Choice accounts," Whit Gibbs, CEO of Compass Mining, said in a statement.