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RE: Case Study 7-1: Taxation of Cryptocurrency - Mining (Disregarded Entity - Inventory - Tax Liability)
For my examples, I wanted to look to the taxpayer's selling patterns to try and determine if the property should be treated as inventory or capital. Does the taxpayer hold onto the property as an investment or do they immediately turn around and sell it? Treating it as inventory would clearly be the more conservative approach, but I feel that looking to how the taxpayer treats the property is a reasonable approach.