(PDF) Bitcoin Mining and its Energy Footprint

Deducting electricity on US taxes

I started a small farm this year (bad timing I know) and am filing my taxes as a sole proprietorship. One of my largest expenses, obviously, was electricity. I'm curious how you guys have been deducting electricity expenses and what evidence you've recorded for justification. Some of the articles I've read suggest that you need a separate meter to deduct electricity. The only evidence I' gathered this year was power meter readings from each of my rigs. I then have a spreadsheet that calculates the portion of my electricity bill based on the total KWh for all of my rigs and supporting equipment. I also have comparisons to my prior year electricity bills for each month based on KWh consumed, which lines up cleanly with the amount of electricity I'm allocating towards my mining expenses.

My first question is, is this going to sufficient in the case I'm audited? I have thousands of dollars of electricity expenses and definitely want to deduct them.

My second question is where exactly to deduct the expense. TurboTax Home & Business (Desktop) provides the following guidance for the Utilities category under business expenses section:
Utilities
These expenses apply only to utilities used at your business office(s) or properties, not in your home office.
If you had a home office, do not enter these here:
- Gas
- Electric
- Water
- Trash collection
- Monthly pest control service
- Security alarm monitoring service
- Sewer and septic service
We will enter those expenses when we cover your home office deductions.

So TurboTax makes it sound like I can't deduct electricity as an expense since I operate out of my home residence. If I ignore this and put it in this section anyways, the value lands in Schedule C 1040, Part 2 Expenses, 25 Utilities.
Is this correct? I suppose I could put it under Part V Other Expenses, but I spent more than $3,500, which I think disqualifies me from putting it there.

*EDIT*
One other option would be to treat it as an indirect expense and list it as a part of a home office deduction as detailed here: https://digitalcurrencyaccounting.com/2017/11/22/how-to-deduct-bitcoin-mining-costs/

The problem here is that my mining rigs constitute a very small percentage of my living space. If I multiply my total electricity bill for the year by the percentage of my "home office space" based on mining rig footprint, the amount I could deduct is less than $100.
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T4D #84 - Pt 2 Bitcoin Mining, BFL ASIC vs FPGA vs GPU vs CPU

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