What do you guys use to track the mining profit you are getting?
Since i have not been tracking my mining, because of stupid ignorance… I now have to go back to all transactions i have received from mining pools and write down how much i got and the value at that date + value for date sold.
I was wondering is there any easier way to do this? How would i be able to find this out for over a 100 transactions? If there is no automatic way, Do i have to look at the closing value of zcash for every transaction date i got?
Any help would highly be appreciated
Whenever I receive a pool payout, I copy the DTG (Date/Time Group), the amount, and the value of ZEC at the time the payment was transmitted in a little log book. This gives me some method to track my “basis”. Obviously, whenever I cash out, I follow the same process. To make things easy, I attempt to cash out in increments equal to my payment threshold (or in multiples thereof), so that I can easily correlate a “payout” date with a “sell” date. I use these two ZEC values (at payout - at sell date) to calculate a reasonable approximation of gains/losses.
Hi, thank you, but is there a way to find the value at the exact time of the payout? All im being able
To find is by date not time and i have hundreds of small payouts!
My recommendation is to alter the size of your payout to simplify. I receive payouts in increments of 0.5 Z, for example. Regarding the hundreds of payouts you’ve already received, I believe it would be perfectly acceptable to group them in 24-hour blocks (or whatever time denomination you choose to use) and take the middle value of ZEC for the day. I wouldn’t worry about making an entry for each micro-transaction. Again, just my thoughts.
I am NOT a tax advisor. Do not construe this as anything other than what I might do in a situation that might appear similar. I would do as belgarion advises and lump them into a set time period. Whatever time period I chose, I would be consistent. The key is paying taxes and keeping records to justify why that is the taxes owed. The only way I see that the IRS would know any different is through an audit. If I am paying taxes, I just need to justify why the amounts are correct and in alignment with the rules set forth by the IRS.
This reminds me, I have to talk to my CPA about how mining creates taxable events. Is the creation of the zcash through mining a taxable event? Or would we pay taxes when we sell eventually in the form of capital gains based on a $0 cost basis? I was looking to aim for a $0 cost basis approach.
Remember, if you are selling Zcash to have the USD, then you just need to show the total USD received minus any depreciation of computers and cost of doing business. You just have to show how you arrived at your profits. If you are keeping the Zcash (or selling to buy another digital currency), then the number you give the IRS and pay taxes on initially (if that is a taxable event) will just be the cost basis when you eventually sell. If you are smart and paying taxes, they get their pound of flesh no matter what.