Odaily Planet Daily reported that the crypto lending company Arch launched a tax optimization plan called TaxShield, which uses the "bonus depreciation" clause in the U.S. tax law IRS §168(k) to allow investors to deduct the cost of mining equipment from taxable income.

The program works like this: users secure an overcollateralized loan from Arch using Bitcoin as collateral. The mining equipment is then purchased and hosted by Blockware. Investors can fully deduct the equipment cost in the first year, potentially offsetting hundreds of thousands of dollars in taxes, while continuing to receive mining profits.

Arch co-founders Himanshu Sahay and Dhruv Patel said the service, developed in collaboration with Bitcoin educator Mark Moss and Blockware, is primarily targeted at high-income Bitcoin holders. For a client earning $1 million annually, the program could reduce their federal tax bill by approximately $400,000 and generate additional mining rig returns without selling their Bitcoin. (CoinDesk)