Crypto and tax

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Heatho

Heatho

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Just wondering how people are working out their tax obligations regarding capital gains and capital losses for CGT purposes?

Are members using accountants or specialised platforms such as this one to generate the correct data for tax purposes? https://cryptotaxcalculator.io/au/

Is it compulsory to report losses to the ATO?

The ATO will be cracking down on crypto's this year and I think members should have things sorted out regarding their tax obligations.

Cheers
 
Heatho I believe that losses are to be reported just as gains are. Also be aware any windfall may affect those on a pension or part pension. I suppose that is no different from any form of additional income.
Mackka
 
This may be of interest, this was sent by my accountant

Talking Crypto Debunking some myths

If you are not in the space of cryptocurrencies now, continue enjoying the last of the sunshine here in Adelaide and we will see you shortly for your yearly tax check-ups.

On the other hand, if you have been dabbling in the space it is best to tune in.

The ATO have been slowly implementing data matching amongst Australias larger exchanges including but not limited to Coinspot, Coinjar, Swyftx and Binance Australia.

A common misunderstanding is the way cryptocurrencies are taxed, there are some common misconceptions that if you dont pull it out into Australian dollars (AUD) or just swap cryptocurrencies it wont be taxed. Unfortunately any transaction made between trading pairs will create a taxable event. i.e BTC/USDT find the respective AUD rate to the pair and calculate the gain on the sell/swap.

If you have a few holdings and plan to hold onto them post 2021 FY then by all means continue to do as you planned. For those who are actively trading your holdings, please get in touch with the team as we can provide you our spreadsheet for data collection.

Then there are the traders out there who may be making upwards for 20 trades a week and in this case, the exchange you may be trading on will have a history of all orders completed in the form of a .csv file and this will provide a lot of the information we will need to complete your crypto taxes for 2021.

For our clients who have really dived into the rabbit hole and are staking tokens in liquidity pools for yield farming, these events are treated much like dividends would be. Although you may not realise the tokens in AUD, the event of the protocol paying you your yield on a weekly/monthly/quarterly bases needs to be calculated at the tokens price on the day of receiving your rewards for staking.

Another common misconception is the use of a cryptocurrency to purchase an item under $10,000 for personal use will not be treated as a taxable event. Of course, there is always multiple scenarios, but we will cover the most common here.

Example 1; You purchase BTC in January 2021 with the intention to hold the asset as an investment and in May 2021 your insurance company begins accepting BTC as a form of payment. You pay your insurance with BTC and think none the wiser. In this case, the asset was purchased in the form of an asset and then used to pay for a personal services/good. This would create a Capital Gains Tax (CGT) event as the asset has been disposed of and the value of BTC disposed will need to be calculated.

The process of declaring your gains/losses is much like shares for the sake of complexity. I have been active in the crypto space since the middle of 2019 and coupled with my taxation background I can assist you in tax planning and advice. It is something I am extremely passionate about and I wish to help each one of you who are facing the dilemma of reporting on your crypto gains.

The ATO and Australian Government are very much catching up in the space and I do believe abiding by their rules is in everyones best interest. As the old saying goes you cant fight city hall, we want to always provide you with the latest information and have our hand on the buzzer to actively place the best strategies in place.

To talk exit strategies in for your cryptocurrencies please get in touch with the team so we can recommend the best advice for your 2021 tax obligations.
 
Like everything related to tax its best to speak to an accountant about your own circumstances, the ato website is pretty clear in a general sense but personal advice is the best way forward as everyones circumstances are different.

If anyone has waited till now to decide to seek clarification or advice then next finacial years resolution should be to keep the accountants email and contact number handy and be at least on a first name basis with them :lol:
 
We work with Kovatax in Brisbane, rule of thumb is record any transaction/trade and the USD/AUD at that time, the rate may not be needed but if you record it will make life easier if needed later. No much different from US shares, currency value will be needed at time of purchase and sale.
 
Heatho said:
Just wondering how people are working out their tax obligations regarding capital gains and capital losses for CGT purposes?

Are members using accountants or specialised platforms such as this one to generate the correct data for tax purposes? https://cryptotaxcalculator.io/au/

Is it compulsory to report losses to the ATO?

The ATO will be cracking down on crypto's this year and I think members should have things sorted out regarding their tax obligations.

Cheers
Click to expand...

Well if anyone needs a tax accountant with specific knowledge with crypto currencies and how they are tax through the capital gains tax regime , pm me :)
 
Maybe someone can set me straight.

No income at all, nowhere near a tax threshold because of that, only cents in bank interest.

Invested into crypto, costs to do so, swapped a bit around, bought some more.

CSV shows less than $250 realised gain due to swaps, with almost as much in fee's..

Intent for 2yrs, adding to the investment.

Do you think I need to do a return ??

:/
 
Wrong topic for discussing your crypto buys but what on earth made you buy tenX coins.?
 
Greenhornet_au said:
Maybe someone can set me straight.

No income at all, nowhere near a tax threshold because of that, only cents in bank interest.

Invested into crypto, costs to do so, swapped a bit around, bought some more.

CSV shows less than $250 realised gain due to swaps, with almost as much in fee's..

Intent for 2yrs, adding to the investment.

Do you think I need to do a return ??

:/
Click to expand...
Yes you do , as you had a capital gains event
 
Danny13 said:
Smoky bandit said:
As long as no profit has been deposited to your bank then there's no need to do anything. :Y:
Click to expand...
The government can see things Smokey , data match and other sneaky things :(
Click to expand...
Yes but you haven't made any capital gains until you deposit to your bank Danny :)
 
Maybe Dan can elaborate for ya smokey.... myself... I'd recon they'd still want to know what's cooking on the side so they can see the entire meal
 
Smoky bandit said:
Danny13 said:
Smoky bandit said:
As long as no profit has been deposited to your bank then there's no need to do anything. :Y:
Click to expand...
The government can see things Smokey , data match and other sneaky things :(
Click to expand...
Yes but you haven't made any capital gains until you deposit to your bank Danny :)
Click to expand...
As Silver said , they want to know whats cooking on the other side of your bank account .
 
Losses can be used to offset future capital gains, but you need to keep accurate records.
Eg lets assume you lost 10K this financial year, next financial year you make 11K profit.
11k-10K, gives you a 1K taxable investment position.

Basically what ever applies to Tax treatment on shares is applied to cryptos, no franking credits though.
 

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