Solo Mining Taxes 2026: What happens if your Bitaxe finds a block?

By Dominik Lederer, Founder, Hardware Engineer & Solo-Mining Expert · August 5, 2026 · 8 min read

The question comes in almost every second email we receive, and it almost always comes in the same form: "What do I actually do if the thing really finds a block?" They rarely mean the wallet. They mean the tax office.

The honest answer is more inconvenient than most expect, and at the same time, more relaxed. Inconvenient, because in an emergency, there's no fine print to hide behind. Relaxed, because in 13,223 out of 13,224 statistical years, simply nothing happens that needs to be declared on a tax return.

Do I have to declare my Bitaxe to the tax office if it doesn't find anything?

No. Without inflow, there is no income, and without income, there is nothing to declare. This may sound trivial, but it's the point where solo mining fundamentally differs from everything else written in crypto tax guides.

Pool mining pays out small amounts daily. Staking pays out. Lending pays out. Solo mining never pays out until it pays out everything at once. From a tax perspective, a Bitaxe is invisible 364 days a year and, on one statistically very unlikely day, a case for Schedule SO.

The official guide to the income tax declaration explicitly mentions mining by name. Lines 14 to 21 of Schedule SO, according to ELSTER, are for "income from activities related to crypto assets (e.g., mining, forging, [passive] staking, lending, and participation in airdrops or similar operations)," provided they are not attributable to any other type of income. If you had zero inflow, you enter nothing there.

Why is the 256 Euro tax-free limit almost worthless for solo miners?

This is where it gets interesting, and this is where I haven't found a clean calculation in any German source. So I did it myself.

Paragraph 22 No. 3 Sentence 2 of the Income Tax Act states: Income from services "is not subject to income tax if it amounted to less than 256 Euros in the calendar year." This is a tax-free limit, not an allowance. At 255.99 Euros, everything is tax-free; at 256 Euros, the full amount is taxable.

Now for the counter-calculation. At the current difficulty of 126,231,507,121,868, a device with 1.3 TH/s needs an average of 417,046,303,702 seconds for a block, which is 13,224 years. Multiplying the 1 in 13,224 chance by today's block value of approximately 174,100 Euros results in an expected value of 13.17 Euros per year. The tax-free limit is therefore 19.4 times the statistical annual yield. In other words: The 256 Euro limit only becomes relevant in terms of expected value when approximately 25 TH/s is achieved, which corresponds to about 19 Bitaxe Gammas side by side on a shelf.

And that's precisely the point. The tax-free limit reliably protects those who don't need it, namely pool miners with a steady mini-income. For solo miners, it doesn't even remotely apply in the one year that it would matter. Between 0 Euros and 174,100 Euros, there is nothing in solo mining.

What happens tax-wise the second my Bitaxe finds a block?

The inflow is the trigger, not the later sale. The BMF letter of March 6, 2025, states in paragraph 47 that the acquired crypto assets "are to be valued at the market price at the time of acquisition." As a source of prices, the tax authorities explicitly accept a trading platform such as Kraken, Coinbase, or Bitpanda, or a web-based list such as CoinMarketCap or CoinGecko, according to paragraph 43.

Paragraph 34 also clarifies that not only the block reward counts: "Income includes both the block reward and the transaction fees received." So, if you find 3.125 BTC plus transaction fees, both are taxed.

Let's calculate it. At an exchange rate of 55,717.70 Euros (Kraken, August 5, 2026, 06:11 UTC, cross-check CoinGecko 55,731 Euros), the block without fees corresponds to an inflow value of 174,117.81 Euros. This amount is added as other income to the taxable income of the year of discovery and is subject to the personal income tax rate, which according to the basic table is between 0 and 45 percent. If we calculate illustratively with 42 percent, that would be around 73,100 Euros, plus solidarity surcharge and church tax, if applicable. The actual rate depends on other income; this figure is explicitly an assumption.

And now for the part that I consider most dangerous: The tax is due in Euros, but the inflow was in Bitcoin. If you don't sell after the discovery and the exchange rate drops significantly before the tax assessment, you still owe tax on the inflow value. This is exactly what broke many crypto investors in 2018. This isn't a solo mining problem, but an inflow principle problem, but it hits a block discovery with full force.

When can I sell the found Bitcoin tax-free?

Here, two clocks are running, and they are constantly confused.

Clock one is the income tax on the inflow. It expires on the day of the discovery. Holding it doesn't change anything.

Clock two is the speculation period according to Paragraph 23 of the Income Tax Act. Because mining, according to paragraph 33 of the BMF letter, is an acquisition process and not a production, mined coins are considered acquired upon inflow. From this moment, the one-year period begins. If you sell within one year at a profit, the capital gain since the discovery is additionally taxable, with a further tax-free limit applying according to Paragraph 23 Section 3 Sentence 5 EStG: "Profits remain tax-free if the total profit from private disposal transactions in the calendar year was less than 1,000 Euros." After one year, the capital gain is tax-free.

A persistent myth must be debunked here: The previously feared extension to ten years for assets used as a source of income does not apply to Bitcoin. Paragraph 63 of the current BMF letter is clear: "For currency or payment tokens, the extension of the disposal period according to Paragraph 23 Section 1 Sentence 1 No. 2 Sentence 4 EStG does not apply." Bitcoin is explicitly named as a currency token in paragraph 3 of the same letter.

Can I offset the electricity costs from the waiting years?

In principle, yes, and this is the most practically valuable point in this entire text. Paragraph 47 literally lists the deductible items: "As income-related expenses, for example, expenses for the acquisition of the necessary hardware and software (possibly in the form of depreciation) as well as for electricity consumption can be taken into account."

A Bitaxe Gamma 601 draws about 17 watts, i.e., about 149 kWh per year. At electricity prices between 31.1 and 35 cents per kilowatt-hour, this amounts to 46 to 52 Euros in operating costs annually. Over ten waiting years, this sums up to 460 to 520 Euros, plus the depreciation of the hardware.

The catch is in Paragraph 22 No. 3 Sentence 3 EStG: "If the income-related expenses exceed the income, the excess amount may not be offset when determining income." So, a mining loss does not reduce the tax on your salary. However, Sentence 4 opens a door: The losses reduce "the income that the taxpayer has earned or will earn in the immediately preceding assessment period or in the following assessment periods from services within the meaning of Sentence 1."

Translated: Anyone who declares electricity costs annually in Schedule SO and has them assessed can offset them against the block reward in the year of discovery. Anyone who never submits a Schedule SO forfeits this carry-forward. An honest admission here: Whether the tax office accepts a multi-year loss without any income or classifies the whole thing as a hobby without profit-making intent is precisely the point where a tax advisor should be consulted. I am not aware of any published decision that clearly resolves the solo mining case.

When does my hobby become a business?

The BMF does not provide any figures. No hashrate threshold, no kilowatt limit, no number of devices. It refers exclusively to the characteristics of Paragraph 15 Section 2 of the Income Tax Act, specifically in paragraphs 35 to 39.

Two of these are effectively assumed to be met by the letter. Paragraph 38: Block creators participate in general economic transactions, "that the remuneration depends on the successful creation of the block does not preclude participation in general economic transactions." Paragraph 39: "Block creation does not constitute private asset management." As a distinction, only a lack of sustainability and a lack of total profit prognosis realistically remain, and paragraph 45 explicitly mentions only the case of sustainability as an example for Paragraph 22 No. 3.

My personal interpretation, and this is an opinion, not information: For a single 17-watt device with a statistical annual yield of 13.17 Euros against 46 to 52 Euros in electricity costs, a total profit prognosis is practically not feasible. However, someone who operates a shelf with twenty devices, enters into a separate electricity contract, and documents profit intent moves into a different category. If you are unsure, you should ask beforehand, not afterwards.

Does the new crypto reporting obligation from 2026 change anything for me?

For the solo miner himself: no. The Crypto Asset Tax Transparency Act implements the EU directive DAC8, and Paragraph 21 KStTG states: "The obligations under Sections 2 to 5 shall apply for the first time for the calendar year 2026." Reporting is to be done to the Federal Central Tax Office by July 31 of the following year, as per Paragraph 9 Section 1, meaning the first report is due by July 31, 2027.

The addressees are explicitly providers, namely crypto asset service providers and crypto asset operators, not private individuals. Anyone who mines solo and holds the coins in their own wallet does not trigger a reporting requirement, as there is neither a trade nor a provider status. However, as soon as the same Bitcoin is sold via an exchange, one becomes a registered user there. This is the moment when the find becomes visible to the tax authorities, and another argument for having one's documentation in order beforehand.

Prepare for tax implications in four steps

1. Document start of operations. Record the purchase receipt for the hardware, date of commissioning, serial number, or board ID. This is the basis for any depreciation.
2. Measure electricity consumption instead of estimating it. An intermediate plug with a consumption meter for under 20 Euros provides a reliable annual value. No tax office accepts estimated values for income-related expenses.
3. Fill out Schedule SO every year, even with zero income. This is the only way to establish the determined loss carryforward according to Paragraph 22 No. 3 Sentence 4 EStG, which can be offset in the year of discovery.
4. Create a price documentation for the day of the find. Screenshot or export file of the chosen price source with a timestamp, always using the same source. Paragraph 91 of the BMF letter explicitly requires consistent valuation.

How does the Bitaxe compare in everyday use?

	Bitaxe Gamma 601	Traditional Lottery	3500-watt Industrial Antminer
Chances of winning per year	1 in 13,224 for a full block of 3.125 BTC plus transaction fees, at 1.3 TH/s and current difficulty	1 in 139,838,160 per Eurojackpot ticket for the main prize, but more frequent small wins in lower tiers	About 1 in 64 at 270 TH/s, but almost always in a pool and thus without the solo moment
Running costs in a home office	46 to 52 Euros electricity per year, documentable as income-related expenses, no subscription, no fees	Each ticket costs anew, none of it is deductible, the stake is gone after the draw	30,660 kWh per year, so 9,535 to 10,731 Euros electricity, plus noise and waste heat that no living space can handle
Drawer danger (boredom factor)	Low, because the dashboard is always accessible and the device operates visibly in the room	High, a lottery ticket is just paper after the drawing and means nothing	Very high for private individuals, because the device ends up in the basement or directly in a data center
Learning effect & Blockchain fascination to touch	High, after a few weeks, you understand difficulty, shares, stratum, and incidentally, paragraph 22 number 3 EStG (German Income Tax Act)	None, six numbers remain six numbers	Present, but business-oriented instead of playful, and rarely experienced in one's own living room

A Bitaxe is almost always nothing from a tax perspective, and on a single day, it can be six figures. Those who understand this beforehand buy with open eyes. Those who understand it afterward buy themselves trouble. Dominik Lederer, Founder Polarblocks

Frequently Asked Questions about Solo Mining Taxes

Does the 256-euro exemption limit apply per person or per household?
Per person. The official ELSTER guide clarifies: "For joint assessment, the exemption limit of 256 euros applies to each person."

Do I have to report a block discovery immediately or only with my tax return?
The income must be included in the income tax return for the year in which it was received. The law does not provide for a separate immediate report for private individuals. However, for an amount of this magnitude, adjusting advance payments is an issue that should be clarified with a tax advisor.

Do the transaction fees in the block also count as income?
Yes. Marginal note 34 of the BMF letter of March 6, 2025 explicitly mentions block rewards and transaction fees together.

Is the 10-year speculation period for mined coins an issue?
No. Marginal note 63 expressly excludes the extension for currency tokens like Bitcoin. It remains one year from the inflow.

What if I operate my Bitaxe in a pool instead of solo?
Then small amounts flow in continuously. At 1.3 TH/s, the statistical annual yield is around 13 euros, well below the exemption limit. Marginal note 46 clarifies that paragraph 22 number 3 EStG can also apply to pool participation.