As a Crypto Miner, my understanding is this:
Your mining is either considered a "business" or a "hobby" by the IRS. To be a Business, it should be treated as a business. You would ideally incorporate, keep records, have enough revenue to be significant and so on. Otherwise, it's a hobby.
If it's a Hobby, you are out of luck. You have to report all Crypto earnings and cannot write off any expenses. You can't write off power and you can't write off your GPUs and definitely can't write off your loss as to the IRS it'd be like selling Legos for a loss - not reportable.
If you ARE classified as a business then you would file all of your expenses, income and so on and both the purchase and the sale of your assets would be their own line items.
