BlockOps Mining · Updated September 14, 2026
Not tax advice. Whether you can use the deduction depends on your situation, and only your CPA can answer that. Figures are a September 14, 2026 snapshot: hashprice ~$39.22 per PH per day, bitcoin ~$79,000. Prices move, so treat every figure here as approximate.
Key Takeaways
1
Write off the machine in year one. Buy a ~$2,100 miner, deduct $2,100. 100% bonus depreciation is permanent.
[1]
2
Mine bitcoin below market price. An S21 on 7 cent power produces a bitcoin for ~$59,200 in electricity. Market price is ~$79,000.
3
Passive income, without the stress of real estate. We run the hardware and own the land. Bitcoin lands in your wallet every 4 hours, roughly ~$100 a month net on an S21 XP after hosting.
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4
Ask your CPA before you buy. Section 469 decides whether the deduction works against your income. Most turnkey hosting fails that test.
[2]
Planning a hardware purchase before year end?
Equipment has to be hashing, not sitting in a crate, to count for this tax year. Tell us what you are considering and we will come back with pricing and a racking date.
Rates as low as $0.07/kWh pass-through, curtailment capped at 120 hrs/yr, you keep title.
Benefit 1: write off the machine in year one
Short answer
Buy a ~$2,100 miner, deduct $2,100 this year. At a 37% marginal rate that is ~$777 back, so the machine really costs about ~$1,323. This is IRC section 168(k), and it is permanent for equipment acquired after January 19, 2025.
The One Big Beautiful Bill Act made this permanent on July 4, 2025.[1] One date matters. Equipment acquired after January 19, 2025 gets the full 100%. Anything acquired before that is stuck at 20% for 2026.
The machine has to be running by December 31, not just paid for. A miner in a crate is not placed in service. That is why racking dates matter in Q4.
Ask your CPA first. A deduction only helps if you can use it. Under section 469, passive losses offset passive income, not your salary.
[2] Whether hosted mining counts as passive depends on material participation, and the rules are tighter than most vendors admit. Watching a dashboard does not count. Settle this before you buy.
Examples from our current inventory
A few machines we have available right now, with what they cost and what they cost to host per month.
Bitmain S21+~$1,750
Used, turnkey. 225 TH/s at 3,540 W. ~$204 a month to host.
Bitmain S21 XP~$2,100
Used, turnkey. 270 TH/s at 3,645 W. ~$210 a month to host.
Bitmain S21 Pro~$1,750
New, preorder. 234 TH/s at 3,510 W. ~$202 a month to host.
Bitmain U3 S21e XP~$9,480
New, preorder. 860 TH/s at 11,180 W. ~$644 a month to host.
Run the deduction on any of them. The S21 XP lists at ~$2,100, so the year one deduction is $2,100, worth ~$777 back at a 37% rate. That puts the real cost of the machine near ~$1,323, and it starts producing the day it is racked.
That is a sample, not the whole list. Full inventory, specs and current pricing are on the miner sales page.
Power rate decides the rest. One cent per kWh on an S21 XP is about ~$319 a year. What a quoted rate actually includes is in billing during curtailment, and the point at which an older machine stops working at all is in when to stop hosting an old miner.
Benefit 2: does bitcoin mining actually produce passive income?
Short answer
Yes. You buy the machine, we run it, and bitcoin arrives in your wallet every 4 hours. An S21 XP at our rate produces about ~$313 a month of bitcoin and costs ~$210 a month to host, so it nets around ~$100 a month with nothing required from you. On a ~$2,100 machine that is roughly 13 month payback after the year one deduction.
You own the hardware. We rack it, power it, cool it, monitor it and repair it. Payouts go out every 4 hours through NiceHash to an address you control. No lockup, no redemption window, no balance sitting on our books waiting for you to ask for it. If we vanished tomorrow, the bitcoin already paid out is already yours. That last part is the difference between this and most things sold as passive income.
Mined bitcoin is ordinary income at its value on the day it arrives, not when you sell.[3] Every payout is a taxable event and sets your cost basis. What you do with the coin after that is a separate capital gain or loss.
One warning on the word itself. Passive in tax law is not a compliment. If the activity is passive to you under section 469, the year one deduction cannot offset your salary.[2] Structures exist that solve this, and they turn on who controls firmware, pool and curtailment. Your CPA sets one up before you buy.
Benefit 3: mine bitcoin below market price
Buying bitcoin costs the market price. Mining it costs electricity. If your power is cheap and your machine is efficient, mining is cheaper, and that gap is the whole argument.
Electricity cost per bitcoin equals power cost per TH per day, divided by hashprice per TH per day, times the bitcoin price. At ~$39.22 per PH per day and bitcoin near $79,000, here is where each machine lands on 7 cent power.[4]
Antminer S23 Hydro, 9.5 J/TH~$32,100
41% of market price
Antminer S21 XP, 13.5 J/TH~$45,700
58% of market price
Antminer S21 Pro, 15.0 J/TH~$50,800
64% of market price
Antminer S21, 17.5 J/TH~$59,200
75% of market price
Antminer S19 XP, 21.5 J/TH~$72,800
92% of market price
Antminer S19j Pro, 29.5 J/TH~$99,800
126% of market price, more expensive than buying
Electricity only. These numbers exclude hardware, management fees, repairs and shipping. They move with hashprice and the bitcoin price. The last row is the warning: an S19j Pro mines bitcoin for about 26% more than you could just buy it for.
When mining is the wrong answer
Three cases where you should buy bitcoin instead, or do nothing.
Your CPA says the loss is suspended and you have no passive income.The deduction does not vanish, it waits until you have passive income or sell. If the write-off was the whole reason to buy, that changes the decision.
You only want exposure to the bitcoin price.Mining adds hardware, operations and counterparty risk on top. An exchange or an ETF gives you the price and none of that.
You are buying old hardware because it looks cheap.Used S19-class machines are cheap for a reason. At most hosted rates they lose money every day they run. More in
when to stop hosting an old miner.
Frequently asked questions
Can buying bitcoin miners offset my W-2 income?
Only if the activity is not passive to you under section 469, which requires material participation. A standard turnkey hosting arrangement, where the facility makes the operating decisions, generally does not meet that bar, and the regulations exclude time spent reviewing dashboards and reports. There are structures that address this and they have to be set up before you buy. This is a question for your CPA, and any vendor who answers it with a flat yes is not being careful with you.
Do miners have to be running by December 31?
To claim the deduction for that tax year, yes. The test is placed in service, not purchased or paid for. Hardware that is ordered in December and racked in January belongs to the following tax year, which is why lead time and racking speed matter more in Q4 than at any other point in the year.
Is the bitcoin I mine taxed twice?
No, but it is taxed in two stages. Mined coin is ordinary income at its fair market value on the day you receive it, and that value becomes your cost basis. If you later sell it for more, the difference is a capital gain measured from that basis, not from zero.
What happens when I sell the machines?
Section 1245 recaptures prior depreciation as ordinary income. Because a full first-year deduction drives the basis to zero, essentially the whole sale price comes back as ordinary income rather than capital gain. That is worth modelling at purchase rather than discovering at exit.
Are there energy tax credits for mining equipment?
No. Sections 48E and 45Y apply to electricity generation and storage facilities. A miner is load, not generation. Only a taxpayer who owns qualifying generation could claim those, and any pitch implying energy credits for mining hardware is wrong.
Bring your CPA the real numbers
Tell us what you are considering and we will send hardware pricing, our hosting agreement and a racking date, so your accountant can rule on the deduction before you commit to anything.
Rates as low as $0.07/kWh pass-through, curtailment capped at 120 hrs/yr, you keep title.
