What tax implications do I need to be aware of?

Tax treatment of Bitcoin mining rewards varies by jurisdiction and individual circumstances. The information below is for general awareness only and should not be considered tax advice.

How mining rewards are typically treated

In many jurisdictions, including the United States:

• Mining rewards are generally considered taxable income when received

• The fair market value of the reward at the time of receipt is commonly used to calculate income

• Rewards may be taxable whether they are paid in BTC or fiat

BTC vs. Fiat payouts

• BTC payouts: You may owe income tax based on the BTC’s market value at the time it is credited to your wallet. If you later sell or exchange that BTC, you may also incur capital gains or losses

• Fiat payouts: Typically treated as ordinary income at the amount received. No additional capital gains apply unless the fiat is later converted into another asset

Recordkeeping matters

Users are responsible for keeping accurate records for tax reporting, but Ridgeline provides tools to simplify this process. Using these tools ensures you have a reliable record for tax compliance or audits:

• Immutable payout log: All payouts are permanently recorded in a secure, unalterable ledger.

• Dashboard access: Users can view and download their full payout history directly from their user dashboard.

• Maintain records including payout dates, amounts, BTC market value at receipt, and transaction IDs to support accurate reporting.

Ridgeline’s role

• Ridgeline does not withhold taxes on payouts

• Ridgeline does not provide tax advice

• Users are solely responsible for understanding and complying with their tax obligations

Important: Tax laws vary by country, state, and personal circumstances. We strongly recommend consulting a qualified tax professional to understand how mining rewards apply to you.