Arch Launches TaxShield to Reduce Federal Taxes for Bitcoin Miners
Arch’s TaxShield program leverages IRS §168(k) to reduce tax liabilities for high-income Bitcoin holders through mining equipment deductions, helping them save up to $400,000 in federal taxes.
BTC
Summary
Arch has introduced the TaxShield program, which uses IRS §168(k) bonus depreciation to help Bitcoin holders reduce tax liabilities by deducting the full cost of mining equipment in the first year. Through overcollateralized loans, investors can purchase mining rigs and earn BTC rewards while potentially lowering taxes by up to $400,000 on $1 million income.
Terms & Concepts
- IRS Section 168(k) Bonus Depreciation: A tax provision allowing businesses to immediately deduct a significant percentage of the purchase price of eligible assets, such as mining equipment, from taxable income.
- Over-Collateralized Loans: Loans where the collateral value exceeds the loan amount, reducing the lender’s risk and enabling favorable borrowing terms.
- Bitcoin Mining Rewards: The compensation received by miners in the form of newly minted Bitcoin and transaction fees for validating transactions and securing the blockchain network.