How mining hardware is written off: as depreciable equipment over five years for a mining business, with section 179 and bonus depreciation available in the year placed in service.
Hardware is the largest cost of mining and is only deductible for a trade or business, not a hobby. A business can expense the full cost in year one under bonus depreciation, which can create a loss against other income. Electricity and hosting are ordinary expenses; the coins mined are income at receipt.
If mining is a business, yes, through depreciation, section 179, or bonus depreciation. If it is a hobby, no expenses are deductible and the coins are still income.
Source: IRC 168(k); IRC 179; IRC 183
Last reviewed September 18, 2026. Tax rules change; confirm current law before acting.
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