Turning Hobby Mining into Business Mining

[johnnysau]

Saw this header in ICMJ - Could not read no account. The tricks of business write offs of which i know nothing, maybe some brighter minds can chime in.

 

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[Goldwasher]

If your profiting ion the gold in relation to your cost to dig it isn't a hobby.

Even at that point there may be no need to treat it like a business. you just pay tax on the income from the gold.

I pay taxes through my business when I sell it.

I don't itemize anything per the digging. All my gear except hand tools is used or custom made. So, I'm not gonna hassle with depreciation.

The yearly claim fees are so small why bother.

My gas and insurance and lease are connected to retail sales as well. Yet separate from my mining.

I treat the gold as a commodity I have access to and sell at a profit.

just another line item for me.

If I was selling exclusively to a refiner or gold buyer I wouldn't make as much as I do selling it retail.


I wouldn't do it any other way unless I was only selling gold and didn't have my store.

 

[Bonaro]

You would be surprised how many receipts you can pile up related to your mining activities especially if you travel any distance. I depreciate vehicle, take a deduction for my fuel and milage then there is insurance, licensing, website maintenance etc... it all adds up and is definitely worth doing.

 

[SaltwaterServr]

Saw this header in ICMJ - Could not read no account. The tricks of business write offs of which i know nothing, maybe some brighter minds can chime in.

You know who's good at write offs? Your accountant. Let them handle that side of it if you want to go pro. The more you read into it, the more it makes sense to let them handle it especially when it comes down to writing down losses on start-up costs.

I wouldn't let my accountant mine, and I won't do my accountant's job.

Now knowing the basics for capex/opex based on your expected and proven values in the ground is a must. Chasing a 6" wide vein underground that assays at 2/3rds of a ounce per ton in solid quartz on a tabular reef....well, you're bankrupt already and just don't know it yet.

 

[Reed Lukens]

I ran our mining as a business until 2010 after Cali outlawed dredging. I ended up taking a total loss on my business in 2010 for my dredges because I couldn't go out and legally use my equipment. I wrote off my claims, gear, gas and equipment depreciation every year until I had to close the doors because it never became legal to use again... Until then, I made a profit selling the gold and keeping track of everything, it WAS a good business...

So, then after retiring, we opened up the hard rock mine, got it all ready to go, then all hell broke loose, the kid broke his neck and is now a quadriplegic for life, we were hit by a 16 year old driving over 55 thru a red light, I ended up with separated ribs and a blue disabled placard for life, and my mining partner was diagnosed with stage 4 cancer, and was told to never go underground again... so I just retired completely. But my mining from long past still gives me a paycheck every month, so I have no complaints. Mining is tough, but if the oportunity is there, take it. I still have untouched ground that I plan on hitting soon, so hopefully my retirement can still be filled with big gold. Finding a good paying spot to begin with is the key