Key Takeaways (TL;DR)
- 100% bonus depreciation is permanent under current law. Mining equipment placed in service after January 19, 2025 is fully deductible in Year 1. A $250,000 purchase creates a $250,000 deduction.
- The deduction only offsets W-2 or business income if your mining is an active trade or business under Section 469. Passive classification suspends the loss.
- Hosted mining does not disqualify you. Material participation is about documented hours and decisions, not where the machines sit.
Every fall we hear from the same investor: strong income year, large tax bill coming, and a CPA asking about equipment purchases before December 31. Bitcoin miners are one of the few assets that answer that question while producing revenue around the clock.
How the 2026 Write-Off Works
The One Big Beautiful Bill Act made 100% bonus depreciation permanent for qualifying property placed in service after January 19, 2025. ASIC miners qualify, new or used, along with PDUs and cooling infrastructure.
You take the full deduction in Year 1 instead of a five-year MACRS schedule. For an investor in the 37% federal bracket, a $250,000 purchase is worth roughly $92,500 in immediate tax savings while the machines keep producing bitcoin.
The Catch Most Investors Miss
The deduction only offsets wages and active income if you materially participate in the mining business. Otherwise the loss is suspended under passive activity rules until you have passive income or exit.
The IRS offers seven tests and you only need one, commonly the 500-hour or 100-hour test. Reviewing dashboards, making firmware and pool decisions, and directing repairs all count if documented. This is general education, not tax advice, so run your situation past a crypto-fluent CPA.
Put the Deduction to Work Before Year-End
Miners must be placed in service, not just purchased, to qualify for the tax year. BlockOps racks can rack 300+ units within 24 hours of delivery at $0.08 per kWh with curtailment capped at 120 hours per year, so Q4 hardware is hashing and deductible before the deadline. If you are ready to turn this year’s tax bill into producing infrastructure, contact the BlockOps team today to reserve hardware and hosting capacity.
Email us at marketing@blockopsmining.com
Frequently Asked Questions
Does hosting my miners count against material participation?
No. The tests measure your documented involvement: hours, decisions, records. Hosted miners who actively manage strategy can still qualify. Keep a contemporaneous log.
Is the bitcoin I mine still taxable?
Yes, as ordinary income at fair market value when received. The Year 1 deduction typically offsets that income and more, which is the core of the strategy.
What happens if I sell the miners later?
Selling fully depreciated equipment triggers recapture, taxed as ordinary income. Most investors run hardware through its useful life instead.