Arch Launches TaxShield Program to Help High-Net-Worth Bitcoin Holders in the United States Reduce Taxes on Mining Investments

Crypto lending company Arch has launched a tax optimization program called TaxShield, which leverages the "bonus depreciation" provision in IRS §168(k) of the U.S. tax code to allow investors to deduct the cost of mining equipment from their taxable income. The program works like this: users obtain an overcollateralized loan from Arch using Bitcoin as collateral, and then purchase and host the mining equipment through Blockware. Investors can fully deduct the cost of the equipment in the first year, potentially offsetting hundreds of thousands of dollars in taxes while continuing to receive mining income. Arch co-founders Himanshu Sahay and Dhruv Patel said the service was developed in conjunction with Bitcoin educator Mark Moss and Blockware and is primarily targeted at high-income Bitcoin holders. For a client with an annual income of $1 million, the program can reduce federal tax liability by approximately $400,000 and generate additional returns on the mining equipment without selling Bitcoin. (CoinDesk)