Every savvy investor knows that businesses receive the most favorable treatment in the US tax code, and with the passage of the OBBB (One Big Beautiful Bill) 100% bonus depreciation is high on the list of huge advantages given to businesses looking to purchase mining equipment and put it into service in 2025.
But many will delay the process of mining by waiting to start and form their LLC prior to purchasing miners to make sure they receive the favorable tax treatment with no headaches.
But do you really need to wait? Can you buy miners and then put them into the LLC later?
Short answer: no, you don’t need to wait. Yes, you can contribute to them later with ease. Smart miners grab the rigs when the deal is right, start hashing, and tidy up the paperwork afterwards. Here’s why, in plain English:
Disclaimer: We’re Bitcoin miners, not your CPA or attorney. Always confirm tax moves with a licensed pro in your jurisdiction.
The Knot in Every New Miner’s Stomach
You’ve priced the latest Bitmain Antminer S21XP…
You’ve run ROI sheets…
You’re ready to Rack n’ Roll (our program that gets you hashing same day with readily available miners)
But then…
a voice pipes up:
“Better wait until the state stamps your LLC…
The tax guys say you need a business entity or you’ll lose deductions.”
Weeks pass. The machine price jumps. Bitcoin hops another few thousand. You missed out on mining rewards while everybody else stacked.
You’re still waiting for a paper seal that could have been licked later.
Let’s remove that block.
Step One: Secure the Hash, Not the Letterhead
Why you can buy rigs today
- Startup-cost rules.
The IRS (see Publication 535) lets a new business deduct or amortize up to $5,000 of costs incurred before the company formally exists. Miner invoices, legal fees, even the drive or flight to see your miners in action counts.
→ Translation: order the rigs now; book the cost as startup once the LLC is live.
The issue here is the amount, since most aspiring miners looking for serious cashflow are starting out well above $5000 in spend.
So next is the real solution - Tax-free property transfers.
When you own 100% of a fresh LLC, you can drop personal property, like mining rigs, into it at no gain or loss (IRC §351/§721). A one-page bill of sale does the job and templates are readily available. The LLC picks up your original basis in the equipment and the transfer process takes just a few minutes. Once transferred into your LLC, just change your hosting bills over to the entity. - Depreciation clock starts when the rig powers on.
Plugging in your miners before the LLC forms doesn’t kill bonus depreciation (100% in 2025 through OBBB) or Section 179 expensing. You simply shift the asset to the entity and enjoy the write-off.
Moral of the story: Buying first, then forming the entity later is legal, clean, and common. Just keep receipts and note the relevant dates for your records.
Step Two: Pick Where the Rigs Live
| Option | Good for | Watch-outs |
| Stand-alone mining LLC | Pure asset protection; easy to sell later | Separate bank & tax filings |
| Fold into an existing LLC | Depreciation can offset other business income; no extra state fees | Commingled risk—keep books crystal clear |
Rule of thumb: if your current LLC already takes on real risk (eg, ecommerce, consulting, or other real or personal property investments like real estate or equipment leasing) and you trust its liability shields, adding miners inside can juice deductions against that revenue stream. If the existing entity is squeaky clean and low-risk, spin up a fresh LLC to ring-fence the high-voltage gear and own a fully mining focused business. If you need help making the call for which route to take, we have a great network of CPA referrals experience in the nuances of bitcoin mining to help you make that call.
How the Paper Shuffle Works in Real Life
- Order rigs – pay with personal or business funds.
- Plug in – start stacking sats.
- File LLC online – (often $50–$300; 30 minutes on the state site).
- Sign a bill of sale – transferring rigs to the LLC at your cost basis.
- Open bank & wallet – in LLC name; route future power bills and payouts there.
- Hand docs to CPA – they record startup costs and kick off depreciation.
That’s it. No lost deductions, no IRS drama…just hash power running while the secretary of state clicks “approve.”
Links for Your Accountant’s Inbox
- IRS Publication 535 – Business Expenses (startup-cost rules)
- IRS Form 4562 Instructions – bonus depreciation & Section 179
- IRC §351 & §721 summaries – tax-free property contributions
Waiting Costs More Than Filing
Every day on the sideline is a day someone else mines the block reward you could have earned, and a day rig prices can float higher with Bitcoin.
Grab the gear.
Mine the coins..
Draft the LLC after lunch.
When you’re ready, Abundant Mines can place your order, host your units, and walk your CPA through the process, all while your hash-rate is already humming.
Questions? Book a call with our expert team. We’ll talk strategy first, admin and paperwork second, just like savvy investors do.
Disclaimer: The information provided in this blog is for informational and educational purposes only and should not be construed as financial advice. Please consult with a financial advisor or conduct your own research before making any financial decisions.
