Business Entities and Bitcoin Mining

Legal Questions
1

Hey Mark and Matt.

Long time listener first time caller - thanks for all the knowledge you provide! My question is a two-parter.

  1. I have had an S-corp I’ve used for sales consulting work in Illinois for the past few years, but recently I have scaled back my efforts and my side hustle income has dropped significantly. I am (willingly) spending more time in my W2 for the commissions I garner there. I am considering shutting down the S-corp completely VS converting it into an LLC for something a bit more passive (it will generate less than 40k). What is a good criteria for thinking about whether I should shutter it or convert it?
  2. The business I am thinking of moving into is Bitcoin mining (not in my own home, but through a reputable provider). Are there any advantages to mining Bitcoin in an LLC or S-corp and do you have any tax strategies or general advice when it comes to mining bitcoin? For instance I know there will be repairs needed and that you can depreciate the life of the machines… anything else worth considering?

This one may be a doozy so I hope you have time to answer it. Thanks a lot!

2

We covered your question on the Open Forum Show today, March 28th. Should be up in the next 2-3 days. Thanks so much for listening. If you want to have a strategy session with one of our lawyers, get an Estate Plan, or set-up an Entity, please give us a call at 435-586-9366 or visit www.kkoslawyers.com. Mark and Mat

3

Amazing! Can’t wait to hear more :raising_hands::grin:

4

Hello Mark and Matt,

I recently stumbled upon your videos—specifically The Trifecta—a few weeks ago on YouTube, and I’ve been hooked ever since. I’ve been sharing your content with family, friends, and even my 14-year-old son, hoping to help build your younger fanbase early.

I’d like to become a regular subscriber as I begin my entrepreneurial journey. However, like many immigrants, I face limited resources to afford some of the services necessary to start and grow a business.

Recently, I watched your video “9 Mistakes to Avoid with an LLC.” As I followed along, I began realizing that I’ve made some of those mistakes myself—and I’m wondering if they’re reversible.

Here’s my story:

In 2023, I set out to start an online marketplace for car services. I live in Massachusetts, but a friend advised me to register my LLC in Delaware, which I did, and I also opened a business bank account. Unfortunately, the platform was never developed, and the business never took off as planned.

As a result, there were no transactions in the business bank account except for a $1/month iCloud subscription charged to the business credit card, which I’ve been paying off monthly from my personal account. For the past two years, I also have not filed a business tax return.

Now, I’ve found a small cleaning business operating in both MA and RI that I’m considering buying with the help of a bank loan. But after watching your*“9 Mistakes to Avoid with an LLC,"* video, I promised myself I would ask for your advice before making any decisions.

My question is: Should I register a new LLC for this acquisition, or can I use my existing Delaware LLC to complete the transaction?

Any advice will be much appreciated

Thank you

tony