- Compass Mining sends mined Bitcoin directly to individual retirement accounts, partners with Choice IRA.
- BTC mining model similar to Airbnb, individual miners are provided a hosting facility, motivated to avoid tax on income from Bitcoin mining.
- More clients of Compass to start mining, US emerges as a hub for BTC miners.
A leading mining company in the US offers clients income from Bitcoin mining without triggering a taxable event. The US has emerged as a hub for Bitcoin miners since the BTC hashrate migration.
Compass mining helps clients avoid tax on Bitcoin by sending BTC to their IRA
Compass Mining, a US-based crypto mining company, offers its clients the option to avoid tax on the Bitcoin they mine through the company. By buying mining hardware through their individual retirement accounts (IRAs), individuals can evade taxes on the revenue from mining.
The two companies, crypto custodian Kingdom Trust that offers a digital asset-friendly retirement offering - Choice IRA, and Compass recently signed an agreement. They are working together on this project of helping US customers save on taxes. Kingdom Trust currently has over $18 billion worth of assets in their custody, spread across 20,000 assets.
Through Compass, individual miners will have access to a hosting facility that operates their hardware (purchased through Choice IRA). The company has applied the Airbnb model to mining BTC.
Currently, miners are deterred by tax implications since they pay taxes two times on the income they earn on the mined Bitcoin and the capital gains earned from its sale. By choosing Compass, clients can receive payouts in their Choice IRA and save tax payments on it.
Miners who are part of the hashrate migration from China and own mining rigs are not eligible for the tax advantage. However, this implies that Compass mining are creating a circular Bitcoin economy and adding more miners to the network through their offering.
Ryan Radloff, CEO of Choice, states,
We’re always looking to find solutions for customers who are trying to save more of their hard-earned money and plan for their future. Being able to purchase a Compass miner within your IRA and mine Bitcoin in a tax-advantaged account is an incredible opportunity.
China’s crackdown on BTC mining motivated more miners to migrate to the US, where renewable energy offers a cleaner and cost-effective opportunity. Compass is set to fuel this trend by assisting its US clients in earning through Bitcoin mining.
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