Introduction

Cryptocurrency’s boom has created a fresh avenue for passive income, and leasing mining rigs is a leading method. Rather than purchasing and 法人 税金対策 問い合わせ operating a mine yourself, investors can rent out their rigs to others and earn consistent rental revenue. Even though it's enticing, it brings tax regulations that may be bewildering if you’re new to them. This article breaks down the key tax implications for investors who rent out mining rigs, covering income recognition, depreciation, Section 179, passive activity rules, and more.

What Is a Rental Mining Rig?

A mining rig available for rent is a hardware component—commonly a robust graphics card or ASIC miner—held by an owner and leased to a third party for a specified term. The tenant runs the rig, paying the owner a fee (commonly daily, weekly, or monthly) for the right to use the machinery. The owner does not provide electricity or maintenance; the lessee handles those operational details. In tax terms, the owner’s connection to the rig mirrors any other rental property: owning the asset, earning rental income, and being entitled to related deductions.

Income Recognition

Rental earnings from mining rigs are classified as ordinary income for tax purposes. Under Section 469, the IRS regards it as rental income, mandating the reporting of gross receipts on your return. If you rent a rig for $50 per day and lease it for 30 days, you must report $1,500 of rental income for that month. This income is reported on Schedule E (Supplemental Income and Loss) if you file as an individual, or on the appropriate line of your business return (e.g., Form 1120 if you operate through a corporation).

Deductible Expenses

Similar to any rental business, you can claim ordinary and necessary expenses directly linked to maintaining and running the rig. Typical deductible items include:

The electricity cost incurred by the lessee (commonly passed to the owner as a separate charge).

Repair and maintenance expenses for the rig (such as replacing a defective fan).

Premiums for insurance covering loss or damage to the rig.

Interest on a loan used to purchase the rig.

Depreciation or amortization of the rig’s purchase price.

Depreciation of Mining Rigs

Mining rigs are treated as depreciable property owing to their finite useful life and gradual value loss. Depreciation lets you recover the rig’s cost and cut taxable income, per IRS rules. Tangible property typically uses the Modified Accelerated Cost Recovery System (MACRS) for depreciation. Computer gear usually has a 5‑year recovery period, allowing straight‑line or declining balance methods.

Section 179 Expensing

Buying a mining rig in the year you activate it allows you to expense the full cost via Section 179, capped at $1.16 million in 2024. This means you can deduct the full purchase price in the year of acquisition, rather than spreading it over a 5‑year period. Yet, if your combined equipment purchases exceed $2.89 million in 2024, the expensed amount phases out.

Bonus Depreciation

The Tax Cuts and Jobs Act permits claiming 100 % bonus depreciation on qualifying property in its service year. It lets you deduct the full rig cost right away, if you choose to. Choosing bonus depreciation locks you into it; you can’t later elect MACRS depreciation for that asset.

Self‑Employment Tax Considerations

Typically, rental earnings avoid self‑employment tax as they’re classified as passive income. Yet if you take an active role in managing the mine—supplying electricity, maintenance, or other services beyond leasing—the income might be considered self‑employment income. The determining factor is whether the services are essential to the operation. If the lessee takes care of all operation, the income stays passive. Providing significant operational support can push part of the income into self‑employment tax territory.

Passive Activity Rules

Under the passive activity loss rules, rental real estate and rental equipment are treated as passive activities. This means you can only deduct passive losses against passive income. When passive losses exceed passive income in a year, the surplus gets suspended and rolled forward. However, there is a special rule for real estate professionals and active participants. If you materially participate in the rental, spending at least 500 hours annually, you may offset losses against other income.

Reporting on a Partnership or LLC

Investors often set up a partnership or LLC to own rigs and divide rental income between members. Each member then reports their portion of income and deductions on Schedule K‑1. Form 1065 is filed by the partnership, and its assets are depreciated on the partnership books. The partnership may also elect for Section 179 or bonus depreciation at the entity level.

Tax Planning Strategies

1. Maximize Immediate Deductions – Planning to sell the rig in the next few years? Bonus depreciation or Section 179 offers instant tax relief.

2. Consider a C‑Corporation – If you expect to retain earnings and reinvest profits, a C‑corp may allow you to defer personal income tax until you distribute dividends.

3. Track All Expenses – Maintain detailed logs of maintenance, insurance, and other costs. This helps lower taxable rental income.

4. Separate Operational Costs – If the lessee pays for electricity, treat those charges as separate line items that can be passed through, keeping the income passive.

5. Use Lease Agreements – Drafting a written lease clarifies the rental arrangement and supports passive status with the IRS.

Common Pitfalls

Misclassifying Income – Treating mining rewards as rental income can trigger different tax treatment.

Forgetting Depreciation – Neglecting depreciation or Section 179 can raise your taxable income.

Overlooking Passive Losses – Ignoring the carry‑forward of losses can lead to lost tax savings.

Ignoring Self‑Employment Rules – Providing too much operational support can shift income into the self‑employment bracket.

Conclusion

Leasing mining rigs provides investors a powerful method to earn passive income, yet the tax terrain is complex. By understanding how rental income is reported, maximizing depreciation and expensing options, and staying aware of passive activity and self‑employment rules, you can keep more of your earnings in your pocket. As always, consult a tax professional familiar with cryptocurrency and equipment leasing to tailor a strategy that fits your specific situation.