TLDR
- TaxShield uses IRS §168(k) for bonus depreciation.
- Arch Lending collaborates with Mark Moss and Blockware.
- Participants can significantly reduce taxable income.
Arch Lending introduces a new product, TaxShield, aiming to help U.S. Bitcoin holders reduce their federal tax burden. The plan involves investments in Bitcoin mining equipment, leveraging IRS §168(k) bonus depreciation. This move is particularly significant for high-income individuals holding Bitcoin.
The TaxShield initiative is a collaboration between Arch Lending, Bitcoin educator Mark Moss, and mining operator Blockware. The idea is to convert federal tax liability into a Bitcoin growth opportunity.
Key Players in the TaxShield Initiative
Arch Lending, with Dhruv Patel as CEO and Himanshu Sahay as Co-founder, leads the initiative. Both have extensive experience in crypto lending and digital asset services. Mark Moss contributes his expertise in digital asset tax strategies.
Blockware, a mining operator since 2017, provides the necessary mining infrastructure. According to the official product description, Bitcoin is pledged as collateral for an over-collateralized loan to purchase mining equipment.
Mechanics of Bitcoin Tax Deductions
The TaxShield process involves claiming a 100% first-year bonus depreciation under IRS §168(k). This allows participants to potentially reduce their taxable income significantly. Monthly mining rewards are distributed to Bitcoin wallets.
No new funding or grants are currently announced. Institutional investors including Galaxy Ventures, Morgan Creek Digital, and Castle Island Ventures back Arch Lending. Further details are available on Arch Lending’s official blog.
Regulatory Compliance and Observations
TaxShield is designed to comply with IRS guidelines. Arch Lending emphasizes a compliance-first approach in collaboration with Blockware, which operates U.S.-based data centers.
While formal regulatory comments are pending, the structure remains compliant with federal laws. An educational series is planned by Arch and Mark Moss to delve deeper into tax mechanics.
“By pairing Arch’s lending rails with Mark’s education platform and Blockware’s infrastructure, we’ve made tax-efficient Bitcoin compounding both compliant and simple.”
Himanshu Sahay, Co-Founder, Arch Lending
Projects and Market Reactions
Reactions from prominent figures or influencers in the cryptocurrency space are sparse. Initial statements emphasize the compliance and simplicity of the TaxShield approach.
No specific on-chain data changes have been reported yet, as this product primarily involves off-chain investments. Notably, the opportunity is specific to Bitcoin (BTC), without involvement from Ethereum or other altcoins at this stage.
“TaxShield turns a line item most investors dread into a growth engine.”
Dhruv Patel, CEO, Arch Lending
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