Cryptocurrency topics

Reporting loss on cryptocurrency from the past

doskoi — Tue, 25 Feb 2020 20:19:27 GMT

Hi everyone,

I'm just a little confused about what I need to do. So I do understand the loss from the cryptocurrency (investment purpose) can be carried on to the next years to take down the capital gains. On Tax Year 2017, I've lost $2982.80 and on Tax Year 2018, I've lost $1752.03.

During that time, I didn't think that cryptocurrency was going to be taxed, and forgot about it ever since and did not report it to ATO till now.

I do my taxes myself, and I want to figure out whether I'm supposed to amend the previous years and include those losses, or wait till the 2019-2020 tax report time, and report it then. I am quite lost on what category I must add this to if I was to amend the past reports.

Expertise and insight from someone who knows a lot about this would be greatly appreciated!

Cryptocurrency capital loss offset capital gain from property sale

Lplau — Mon, 24 Feb 2020 09:46:41 GMT

Hi all

Can I use the captial loss from my cryptocurrency to offset the captial gain from the sale of my investment property?

Proof of capital loss

Mika — Sat, 22 Feb 2020 06:16:58 GMT

I have recently collated thousands of CGT events over many spreadsheets for my crypto trading. It will impossible for me to trace back though this to work out every individual event due to split orders, price fluctuations etc.

What I can prove as of this date is that I have a definate capital loss with my trading/ investments. Ie, my current portfolio is LESS than the money I've put into it.

Is there a way I can make a declaration of my holdings to the ATO as of this date (including my raw trading data), then either a) not make any more CGT events between now and EOFY or, b) provide accurate bookeeping for any further events.

Or are there any other options available?

Thankyou.

Crypto Trading & CGT

Mika — Fri, 21 Feb 2020 01:02:48 GMT

Hi, I'm trying to understand my at obligations for my crypto trading this year. In your example,

Example

On 5 July 2017, Katrina acquired 100 Coin A for $15,000. On 15 November 2017, through a reputable digital currency exchange, Katrina exchanged 20 of Coin A for 100 of Coin B.

Using the exchange rates on the reputable digital currency exchange at the time of the transaction, the market value of 100 Coin B was $6,000. For the purposes of working out Katrina's capital gain for her disposal of Coin A, her capital proceeds are $6,000.

Based on your definition, If I was to purchase 10 coin A @ $10each ($100 value),

Trade 5 of Coin A (Now $11) for 55 Coin B @ $1 = ($55 value)

Trade 55 Coin B (Now $1.2) for 5 Coin A (Now $10) = ($66 value)

I now have $116 woth of Coin A and $106 "capital proceeds" by your definition correct? When I've only gain the $10 in value.

Add another level, the proceeds surpass the orginial investment amount. Basically making it impossible to trade?

If the value of trading Coin A to B at any time is always of equal value at the time, why is this a taxable event if there is no realised gain on the investment, until it has been returned to AUD.

Thanks.

Crypto and CGT

mindgames — Tue, 18 Feb 2020 08:09:22 GMT

Hello!

I recently re-opened a portfolio to start trading again, im very aware of how cgt and income tax works with profits of any inverstment the only thing i am ansure of is.

My father heard about my portfolio and asked if i could purchase on his behalf several different cryptocurrencys, i went ahead and did it not thinking of the possible problems i could have with CGT and tax.

So the question now is, we each put in sub ten thousand dollars who pays the CGT on closing out the investment in the future?

If the initial purchase was basicly split 2x ways there is an agreement in writing regarding profits made from the investment are we both under $10k CGT exemption?

TLDR- If an investment over 10kaud is split 2 ways (bringing it under 10kaud each) is it still tax exempt or do we pay CGT on profits?

thanks

Tax for Bitcoin and crypto

1cent — Fri, 07 Feb 2020 01:40:07 GMT

Bought some Crypto coins majorly Bitcoin and few others worth roughly 10K

After few weeks they went down drastically so I sold then off and I am remained with 7.2K

Between these I bought a ledger drive wallet worth 180.00 to store them.

few Softwares subscription total worth 200.00 round.

Because I am in loss and do not have any future plan to buy then again, how will this effect my tax ?

Regards..

Transfer costs: expense or CGT cost base component?

LiveHappily — Tue, 28 Jan 2020 03:53:11 GMT

Consider a simple bitcoin arbitrage trade:

I buy 1 BTC on AliceExchange for 10000 AUD

I transfer the whole balance to BobExchange, and the transfer costs 0.0001 BTC,
equivalent to 1.00 AUD (assuming the market price on AliceExchange has not
changed in the meantime)

I now sell the remaining balance of 0.9999 BTC on BobExchange at a price of
11000 AUD, receiving proceeds of 10998.90 AUD

(Assume for now that there are no commissions on the trades themselves.)

How should I account for the 1.00 AUD transfer fee?

Does this increase the unit cost base of the currency I sold,
keeping the total cost base the same i.e.

(10998.90 AUD proceeds) - (10000.00 AUD cost base) = (998.90 AUD capital gain)

Or do I expense the 1 AUD as an investing cost, reducing my total cost base but
keeping the per-unit cost base the same:

(10998.90 AUD proceeds) - (10000.AUD - 1.00 AUD = 9999.00 AUD cost base)
= (999.90 AUD capital gain)

(with 1.00 AUD submitted as an income tax deduction)

In general I believe the ATO does refer to "transfer costs" as being an
element of the CGT cost base so I presume the answer is the former, but I
would like to confirm this.

Thanks in advance for any advice.

Temporary Resident (482)_Is Bitcoin CGT Applicable

GerardN — Mon, 20 Jan 2020 05:58:29 GMT

Hello,

The CGT as it relates to temporary residents is unclear to me - Could you please advise whether cryptocurrency (i.e. Bitcoin) is subject to the 15% CGT for temporary residents? The section on your website for temporary residents states that CGT only applies to real property in Australia, which in my opinion does not relate to Bitcoin. The Bitcoin is not for use in a business in Australia.

'....you're subject to capital gains tax (CGT) if a CGT event happens to a CGT asset that is taxable Australian property. For example, real property in Australia or a CGT asset you use in a business in Australia.'

Thanks,

Gerard

ICO "free issue" for founders and advisers - CGT treatment

DDZ — Mon, 09 Dec 2019 00:23:10 GMT

Since it appears that crypto is treated as an asset and therefore creates a CGT event when sold, does this same rule apply to "free issue" or bonus coins "given" to founders and advisers?

If so, does the 50% discount apply after one year of ownership?

How is the one year measured?

What documents would be required to satisfy the one year of ownership?

If the coin had to be "re-minted" during the escrow period due to a security breach, would the year of ownership start at the launch of the ICO or at the date of the re-minting?

Sorry for all the questions but I have a friend who is not sure how all of this works and he can't seem to get definitive advice. Some advice offered to him says that any gain from the sale of crypto is considered income rather than capital gains. He is confused by all the conflicting advice offered to him as am I. Thanks for any help with this.

Personal use asset

DDZ — Sun, 24 Nov 2019 04:12:28 GMT

I notice discussions about using crypto for "personal use asset" purchases and a limit of $10,000 per transaction which would not be subject to CGT. My question is how many such transactions can occur in any tax year and still be treated as personal use and therefore not be subject to CGT? Taking this further, would it be feasible to purchase a house, sell $10,000 worth of crypto each month to pay down the mortgage and still not be subject to GCT?

Sole trader receiving a portion of day rate as crypto

Ripe — Sun, 27 Oct 2019 01:51:09 GMT

I'm a sole trader who receives $900 per day excluding GST and an additional $100 worth of cryptocurrency (amount depending on conversion rate). There was a similar question already asked here: https://community.ato.gov.au/t5/Cryptocurrency/Salary-in-Cryptocurrencies/td-p/11756 however I'm not a salaried employee.

How do I do the taxes on the $100 worth of cyptocurrency?

Is CFD trading through an Australian broker necessarily considered Australian domestic income?

Trader12 — Sat, 26 Oct 2019 15:05:19 GMT

If I am a non resident but choose to trade with an Australian cfd broker, is this income on trading profits considered Australian domestic income or foreign source income as I am tax resident elsewhere.

Cryptocurrency CGT

MattL — Sat, 26 Oct 2019 14:10:42 GMT

I have a question in regards to Capital Gains Tax with Cryprocurrency

If I had made multiple Bitcoin purchase's at different dates,

eg.

- 1 BTC in January 2018 for $1000

- 1 BTC in March 2018 for $800

- 1 BTC in October 2018 for $500

If I then sell 1 BTC in October 2019 for $2000, do I make my CGT event on the oldest date which would be January 2018, therefor pay tax on the $1000 profit?

Or can I chose to make the CGT event whenever I would like so long as the vaule is the same?

Therefore I could use my October 2018 purchase and then pay CGT on my $1500 profit.

Thanks,

Matt

Tax implications of using cryptos to transfer AUD out of the country

hades1 — Sat, 12 Oct 2019 03:29:34 GMT

Australian citizen here but living in the US. I wanted to use cryptos to transfer the money I still have in my Australian bank to my US bank to avoid the bad exchange rate banks and other providers offer (between 1-5% of total amount + flat fee from what I have seen).

So, it would go that way: transfer $AUD from Oz bank to Oz crypto exchange ==> buy cryptos ==> transfer cryptos to US crypto exchange ==> Sell cryptos for $USD and tranfer to my US bank.

I think I understand the US tax implications (and I realize this wouldn't be the best place to ask about this anyway) but I am not sure if there would be any Australian tax implications for doing this. I currently don't need to lodge Australian tax returns anymore and I wonder if doing what I was planning to do would change that and what the tax implications would be, if any.

Sorry for the long question, but I was trying to make it as clear as possible

Regards

Receiving Cryptocurrency as a Gift

fri9 — Fri, 11 Oct 2019 08:00:32 GMT

A relative wants to gift me cryptocurrency to pay off my mortgage. The amount is significant so I want to make sure I'm in compliance with Australian tax laws.

Do I need to declare the gift?
What records need to be keep?
What is my cost base for CGT purposes?

Moving coins from exchange to hardware wallet

SriRam — Tue, 08 Oct 2019 21:44:05 GMT

Dear community,
I want to check if transferring coins that are on exchange to a hardware wallet triggers CGT. How does ATO know that the address I had used was my own wallet address? Finally, Do I have to declare any of these transfers in my tax return?
TIA.
Regards,
Sri Ram

Rounding of decimal places and cents

caged_broccoli — Sun, 06 Oct 2019 06:01:23 GMT

How does rounding of cents (for instance in Excel) matter for accuracy?

Excel displays only 2 decimal places but rounds for the actual internal calculation, for instance 40 cents minus 8 cents can sometimes equal 41 cents.

Should I "reset" each cell to hard rounded values for these calcualtions?

Is the same logic applied for crypto amounts beyond 8 decimal places?

What defines a "reputable exchange"?

caged_broccoli — Sun, 06 Oct 2019 05:59:56 GMT

What designates a "reputable exchange"?

Is there a list of which exchanges are deemed reputable? Or a list of exchanges that are deemed non-reputable?

Is there a method of determining reputation? Sometimes the top 10 Google Search results for exchanges list questionable exchanges

Sale of crypto miners taxed as CGT?

caged_broccoli — Sun, 06 Oct 2019 05:58:42 GMT

I've sold crypto miners - does this count as a CGT event? If so, it doesn't seem fair that if I can't claim the miners' purchase that I be taxed on their sale.

This is for a hobby.

Going halves in a crypto mining hobby, classified as gift?

caged_broccoli — Sun, 06 Oct 2019 05:57:14 GMT

I went halves in this crypto mining hobby.

Everything was 50% from the cost of electricity to the cost of the miners and parts, as well as me sending the other person 50% of what they mined, in the form of cryptocurrency.

Is this classified as a gift? If not, what?

How are they supposed to classify their received crypto for their return?

Claiming electricity and cost of crypto miners as a hobby

caged_broccoli — Sun, 06 Oct 2019 05:55:49 GMT

Apparently I can't claim electricity or the purchase of the actual crypto miners if I am classified as a hobby as deductions. Is this correct? Do I only pay CGT on what they mine? Do I only pay CGT on what crypto I exchanged for AUD?

Tally up each CGT event

caged_broccoli — Sun, 06 Oct 2019 05:54:34 GMT

How do I tally up the total of each CGT event? Is the CGT tax payable the total of each CGT event?

This would be obscenely large if I make a lot of transactions and doesn't seem correct. Are these CGT events just for record keeping for 5-7 years in the case of an audit?

Do I just calculate the CGT on what I exchanged for AUD?

12 months CGT discount in same wallet

caged_broccoli — Sun, 06 Oct 2019 05:53:10 GMT

If I buy/obtain some crypto, and sell some of it within 12 months, and then purchase some more of it within 12 months, how much of it can I claim is older than 12 months for the 50% CGT discount if it's in the same wallet? Can I pick and choose how much of the 12 months worth of crypto should apply the 50% discount? If not, do I calculate to the maximum of my favour or to the maximum of the ATO's favour?

Overlap between financial years

caged_broccoli — Sun, 06 Oct 2019 05:48:15 GMT

How does the overlap between financial years before/after the 1st of July work?

How is the crypto not sold after the 1st of July taxed for CGT?

How does it carry over to next financial year?

Crypto currency gift to children

Jono1 — Sun, 29 Sep 2019 13:02:56 GMT

If I gift crypto currency to each of my children today and in 2 years time the value of the crypto currency doubles. What are the tax implications for my children if the decide to sell their crypto currency in 2 years time.

CGT calculation?

Bug — Sat, 28 Sep 2019 12:45:05 GMT

If I buy bitcoin in set amounts over a 3 year period, don't sell for the first 2 years then sell a fraction of my total holdings in the 3rd year. Which bitcoin do I compare the sold bitcoin to when working out any capital gains?

I have all transactions and relative exhange rates recorded but the bitcoin has just sat in a pool on the exchange. So when I sell part of my holdings: am I selling the most recent bitcoin purchased? Do I use an average? Or, something else?

Nevermind....

Finally saw response to previous question. Enquiry answered. Cheers!

Tax implications on lending Bitcoin

Roby — Wed, 18 Sep 2019 03:06:31 GMT

Hi,

A good friend of mine has a Pty Ltd company that trades on local cryptocurrency exchanges.

He offered me to lend him my bitcoin and he’ll pay me back a monthly return + give them back to me at any time upon request (within 5 days).

I’m not sure regarding the tax implications though?

Could you please let me know how this is treated?

Presume I’ll need to pay the usual tax on the interest received? (interest payments will be received in AUD)
When the Bitcoin is returned to me (say in 2 years’ time), are there any tax implications at that point?
Once I will eventually sell them (say shortly after I get them back), will I still be entitled to the 50% capital gain tax exemption? (I bought them over a year ago, will now lend, get back in 2 years, sell for example after 2 weeks)
Would the answers to questions 1-3 be different if a related party (such as his wife or sister) lend to his company? (he’s looking for more lenders so he asked me to ask for him while I’m at it)

Thank you! :-)

Group certificate

willylee76 — Fri, 13 Sep 2019 19:48:45 GMT

How do I find all my group certificate for the last 5 years

Cryptocurrency

Bitboy — Wed, 11 Sep 2019 15:07:51 GMT

I have been mining Cryptocurrency for a year and have invested around $20000 in setup equipment. I have a registered ABN and declared all my mining profits on my recent tax return. I paid GST on all the specialist mining equipment and also at the exchange (point of sale for my mined coins.)

Am I entitled to reclaim GST as my equipment is specialist mining use only?

Thank you

Tax on CRYPTO DEBUT CARDS!?!?

CryptoDude — Tue, 10 Sep 2019 13:10:38 GMT

Is it a personal use asset to spend your crypto on a crypto debit card like TenX etc?

It says here "depending on how long you hold for determines whether it is a personal use asset or not".

WELL how long would it be a personal use asset before it changes. Very VAGUE.

What is the Tax on a crypto debit card for regular payments??

Surely you wouldn't have to calculate every single little transaction.

Let me know

Crypto

Anthony — Tue, 10 Sep 2019 04:10:16 GMT

Alright guys trying to be nice here. You guys want us to calculate every single trade We made I tried to work it out and there is no way to work it out. I just tried to print 3 months of trading and printed around 200 pages and nothing make sense? As every trade they don’t tell you how much profit you made or lost and plus the fees. If you guys want us to pay taxes on crypto you guys really need to
change the rules. And make sure you know how it works. Count only how much we invested or loss and fees. And because we already pay taxes on the money we invested will have to discount that too.Otherwise will have to say I got 100k loss and give all these paper work for you guys to work this out. I have invested 87k and only got 27k left never win at trading. Easy got 15k in fees and the rest is lost. And because didn’t know anything about all these rules. That why now I stop trading and just holding. Usually when we trade it’s to build more coins (Btc) which is all the purpose of trading. We are trying to do the right thing and so should ATO?
Even though it isn’t fair how much you guys charge.
Would like an answer and see if you guys change these rules. Make abit of sense before trying to tax people. You really need to understand how trading works before putting rules that you haven’t got any idea in how it works. Otherwise will have to leave Australia and go back to Portugal which is free taxes on crypto. Or pay my taxes here and keep in being an employee for you who works to pay taxes .

BCH/BSV split, need ruling on which one is the '$0' distribution/airdrop chain.

metal — Mon, 09 Sep 2019 06:48:22 GMT

Question in title.

ATO advice on chain splits,
https://www.ato.gov.au/General/Gen/Tax-treatment-of-crypto-currencies-in-Australia---specifically-bitcoin/?page=2#Chainsplits

Specific reference, "When working out your capital gain, the cost base of a new cryptocurrency received as a result of a chain split is zero."

I basically need a ruling as to which one is the airdrop.

2 chains emerged out of the chain split in November last year. Both the BCH and BSV chains had significant changes. BCH upped the blocksize, added checkpoints, and DSV (data sig verify). BSV went further back towards the original design of bitcoin, upping the blocksize, and adding back some of the original op codes. During the hashwar BCH rented hash, to effectively take the ticker, and the name, and continue on with their upgraded chains protocol.

I'm fine with either being declared the airdrop. But my understanding is that the one that changes the chain's rules, becomes the airdrop.

So, which one should I use as the airdrop, if they both altered the protocol?

Cheers,
Ian

p.s. On a side note, I have to do an amendment to my 17/18 tax. Like many, I didn't declare it, mainly because I was new to crypto, I made a significant loss, and wasn't sure on the tax rules. I'm now sorting through my trading, and will seek an amendment for that tax period. After which I can then submit my tax for the following 18/19 tax period, which why I made this post.

Crypto

Anthony — Sat, 07 Sep 2019 14:06:25 GMT

Yeah no sure why ATO is being so crazy about this crypto as they can’t even understand how it works. Why dont just see how much we invested , how many fees we had and how much he lost. Wouldn’t it be much easier. Why would you wanna know the trades. Just remember the fees will be as lost too They are trying in every way to screw everyone. Let’s say the money I invested was already taxed so it’s my money and I can do whatever I want with it. So I decided to send it to Portugal and from Portugal I bought the crypto which in Portugal we don’t get crypto tax. Is your money you invested and you make profits good but if you make loses too bad. Why are you even trying to tax us ? how many times. This is being ridiculous with all the taxes we pay and can’t even have decent roads and etc I hope I will make millions and go to Portugal free crypto tax

Average AUD value of cryptocurrency on a particular day

caged_broccoli — Thu, 05 Sep 2019 11:33:47 GMT

I'm dealing with thousands of tiny transactions as CGT events (crypto to crypto) as I've mined for various altcoins, sometimes transferred to more popular cryptocurrencies.

It's difficult to get the AUD value for every single transaction, as the price fluctuates every few minutes.

The ATO has declared my mining activity as a hobby and not a business.

I expect that overall I've made a loss, and I am no longer mining.

Before I go looking up the AUD value for every transaction time, can I just take the average daily AUD value for an entire day's transactions? I'm finding it difficult/impossible to look up prices at specific times of the day, and sometimes the value fluctuates significantly within a 24 hour period.

Bitcoin ponzi scheme

Ozyboy75 — Mon, 19 Aug 2019 13:43:56 GMT

Hi 2 years ago between myself and a few friends we invested $60000 into a bitcoin company Called Usi tech which turned out to be a scam, we lost all of our money is this tax deductible as loss

Which Bitcoin to pay CGT on?

Bug — Sun, 18 Aug 2019 08:55:28 GMT

If I accumulate bitcoin over a number of years.
Year 1 : purchase 1BTC @ 2900 AUD
Year 2 : purchase 1BTC @ 10000 AUD
Year 3 : purchase 0.5BTC @ 6300AUD. Then in Year 3 also sell 1 BTC @13500 . Which bitcoin purchase do I use to calculate my capital gain and will the 50% discount for holding for at least 12 months apply?

Ethereum 1.0 to Ethereum 2.0

RogerRamjet — Fri, 09 Aug 2019 10:20:53 GMT

Hi ATO,

Could you provide guidance on the approach to be taken for this forthcoming event. There are mutliple theories best explained in this reddit thread as to how the IRS is likely to treat this event:

https://www.reddit.com/r/ethtrader/comments/cnt9rv/eth_20_is_going_to_be_a_tax_disaster_heres_why/

My concern is that the ATO may treat in a similar manner to the BTC/BCH fork, but this scenario is different in that those who elect to "convert" ETH 1.0 to ETH 2.0 in effect destroy their ETH 1.0 coin, which if treated as a CGT event may result in a loss greater than the original purchase price - which is a concept that is illogical. I would be interested in whether the ATO has guidance in relation to this particular fork ?

Regards

Roger

crypto currency trading fund

pyata — Tue, 06 Aug 2019 10:31:34 GMT

Is there a capital loss available if a crypto managed fund investment went under? There was a Bitcoin amount put into a crypto currency fund. It turned out this was a scam and all of it was lost. Is there a CGT event, so a capital loss can be realised? If not how would this be treated?

cryptocurrencies

hacam_0714 — Wed, 31 Jul 2019 02:38:57 GMT

Hi, I am an international student at Melbourne. I am staying here for the next three years. To whom (Australia or my home country) do I have a tax liability if I become a crypto investor/trader?

Crypto investment loss

Khyvez — Tue, 30 Jul 2019 08:43:27 GMT

Hi everyone, i need an advice regarding crypto investment loss. I have invested a certain amount of bitcoin in a profit scheme investment site or bot but unfortunately i didn’t get any payout and turned out it was a scam when their site/bot suddenly gone. I had loss all my money i put in. Now my question is, would i be able to deduct that amount i lost on my tax claim?

Using Cryptocurrency as Security for a Loan

fri9 — Mon, 29 Jul 2019 14:43:45 GMT

Is borrowing against cryptocurrency a CGT event?

Example

I purchased 10 Bitcoin when they were $1,000 AUD. The 10 Bitcoin are now worth a total of $130,000 AUD.

There are various financial services who will loan up to 60% of the value of my Bitcoin. Is it a CGT event if I take a loan of $78,000 AUD using my Bitcoin as security?

How to declare the Cryptocurrency that hold long term?

bnesys — Sun, 28 Jul 2019 01:51:11 GMT

I purchased some Ethereum back in June 2017 and I still holding some portion of it. Do I need to pay tax at the end of each financial year based on the current value or just at the time I dispose them?

2016-2017= Purchased 10 ETH

2017-2018=still holding = How to declare? (Skip or calculate based on the end of financial year value and declare?)

2018-2019=still holding = How to declare? (Skip or calculate based on the end of financial year value and declare?)

2019-2020=....

Crypto CGT

teeeq — Sat, 27 Jul 2019 04:25:58 GMT

Hi ATO Community,

Hoping to get some advice for my situation.

I did some crypto back in Dec 2017 - Feb 2018 (only around 12 days worth) - I have over 300+ transactions (mostly crypto to crypto transactions) in that period of time from coinspot. Just want to get clarification (I understood there have been multiple questions around this and have trawling through the forums hoping to find an answer)

I wasn't aware of the tax implications during that time as I was only doing it as a hobby; only recently I found out that I have to declare all of it, however, when I extracted my Coinspot statement and ran through it through various calculator etc... and tried checking it line by line - I see a figure of a staggering 100k+!

Hopefully someone can shed light on this for me.. I have got in touch with a crypto tax agency but just awaiting for a response back..

I just wanted to do the right thing and amend my 2017/2018 return, but that amount surpasses what I can pay back...

Short Selling Cryptocurrency

bluealtec — Thu, 10 Jan 2019 06:48:38 GMT

I have tried to search a definitive answer in the web for this question to no avail.

I have made some income via short sale. I borrowed 10 BTC from a lender and sold it on September 2 for $7240 (USD) per BTC. I repurchased 10 BTC on September 5 for $6710 (USD) per BTC and returned the loaned BTC to the lender. In total I made an income of $5300 (USD). I know I have to convert then to AUD.

I want to know what is the tax treatment for this. I have read somewhere that "the sale by the Lender to the Borrower at the beginning of the transaction and the reverse sale by the Borrower to the Lender at the end of the transaction are not regarded as disposals for the purposes of Capital Gains Tax. The securities loan therefore has no Capital Gains Tax or Income Tax implications in respect of the securities lent and is termed tax neutral. The transaction must be reversed within 12 months. If the transaction is not reversed within 12 months, the transaction is regarded as a disposal (sale) by the Lender to the Borrower at the date of the loan, and the exemptions from taxation are not realised. "

So does this mean that my income is not taxable? Thank you.

Is trading cryptocurrency with an ABN PSI?

treefairy — Thu, 10 Jan 2019 06:39:16 GMT

Is trading sale of goods? Is cryptocurrency goods?
Or is it my skills applied to margin trading and arbitrage that is my profit and is that PSI?

Is using my personal skills, knowledge and efforts PSI? Or providing them.

And I can think of how I am providing them as all my trading is done through exchanges, who stop making money if I am not successful at staying afloat. So are my knowledge, skills and efforts given provided to the exchanges so they can keep making profit from my trading fees?

I know it is a stupid question, but I don't know and I want to get my tax return done properly. So the question is the title of this.
Am I selling goods, or am I using effort, skill and knowledge to benefit from market fluctations, arbitrage and complex situations like coin-forks, fake news, nationalist fud like regulation, or korean officials insider trading their own fud? The profit I make has less to do with sale of goods than it does playing the market? Which is skills that helps the exchanges I use make their money out of my ongoing turn over?

Thanks

Tax legislation regarding the creation of cryptocurrency

drblockchain — Thu, 10 Jan 2019 06:25:33 GMT

Hello,

Having been involved in the Cryptocurrency industry for a few years, as well as seeing the legislation catch up to govern it gradually fall into place; I'm quite interested in the specific rules/laws governing the actual creation of cryptocurrency itself.
I've had a good read of the material available and it seems there is literally nothing in this area.
Please note; i'm not asking for how to go about creating the currency, nor after any opinionative narratives - but specifically, what do i need to record, how to go about it the right way.

Thankyou,
drblockchain

What price do i use from Cryptocurrency Markets? High, low, close or open?

Helen2 — Thu, 10 Jan 2019 06:36:02 GMT

Hi,

1.When i traded coins it doesn't show the BTC price. I can go onto Cryptocurrency Markets and check the historical data, but it shows, open, high, low and close prices. which one do i use?

2. I have coins that i have moved back and forth between my wallet and an exchange. For eg, I deposited .8 BTC on the 30/08/17. I then withdrew it to my wallet. Brought some more BTC and then sold . Should i take it from the amount i just brought or from my wallet, since that was the FIFO method?

Please give me some direction, this is driving me crazy.

Can a cryptocurrency be use as an active asset for small business concession purposes?

gesh27 — Thu, 10 Jan 2019 06:26:18 GMT

Question about how to calculate capital gain or loss

Olsen — Sat, 25 Aug 2018 07:00:10 GMT

Hey guys,

To simplify my question the most, consider the below senario:

1. I spent 10,000 AUD for 1 BTC

2. One month later, the price rised and I spent another 20,000 for another BTC and I have 2 BTC

3. Another month later, I sold 1 BTC for 15,000 AUD, then I have 15,000 AUD and 1 BTC.

When I report to ATO, what is my gain or loss, is it 5,000 (15,000-10,000) or -5,000 (15,000-20,000), or in other words I get 1,5000 for selling 1 BTC but what is the corresponding expense for that 1 coin?

I believe many people would sell and buy several times with different price, if you end up selling all the coins it is easy to calculate the gain by just substract expense AUD from the final sale money, but how I shall calculate in the above case which I think is more common happening.

Thanks in advanced

Reasonable site

Helen2 — Thu, 10 Jan 2019 06:33:56 GMT

One of your answers to my question was, "If you need an exchange rate for a weekend or public holiday, you can use any reasonable externally sourced exchange rate for that day". So,is this site https://au.investing.com/currency-converter/?tag=Cryptocurrency#historical_data_converter, considered a reasonable site?

Do i need to have a balance of all my coins at the EOFY

Helen2 — Thu, 10 Jan 2019 06:30:54 GMT

Hi,

Do i need to show a balance of all my coins at the EOFY, and if yes, do i then need to show the worth of them coins at that time? I have the balances but i haven't calculated the deductions in fees as of yet.

ATO treatment of coin / token swaps (coin replaced by a different coin by issuer)

danwani — Thu, 10 Jan 2019 06:27:12 GMT

In some cases, coins / tokens are swapped by the original issuer. This could be because the coins are now trading on a custom blockchain (mainnet rather than Ethereum), or because some fraudulent activity has corrupted the old coins, and a reissue is required to protect legitimate token holders. This has occured multiple times in the past. The coin hasn't been traded, it's still the original coin, it's just now using a new trading name.

In this instance, would the swap be counted as a CGT event? If so, when does ownership of the new coin commence? At the point where the old coins are submitted for the swap, or when the new coins are issued?

What to do with early ledger lost

lvplshyd — Thu, 10 Jan 2019 06:30:04 GMT

I didn't export and save ledger from a trading website before it was shutdown later permanently, happened before I was told need to keep all tracks of tracstaions. How to deal with this case?

Valuing trading stock

Coinflow — Thu, 10 Jan 2019 06:59:58 GMT

If I create my own cryptocurrency/token which costs me next to nothing, i can choose to value it using cost method:

The cost price method includes all costs associated with bringing the stock to its current condition and location. This may include the cost price plus freight, insurance, customs and excise duties, and delivery charges

is that right?

https://www.ato.gov.au/business/income-and-deductions-for-business/reconciliation-activities/accounting-for-trading-stock/valuing-trading-stock/

How does the CGT applied in my case?

maxb512 — Thu, 10 Jan 2019 06:51:28 GMT

Hi, last financial year (2017) I purchased some cryptocurrencies and made some gain on it, the gain was roughly around 12k AUD. The coins were purchased and hold for less than one year and I didn't use them to buy any goods. There were many mini transactions in which exchanges between different coins and different selling and buying transactions happened before my final gains were reviewed and summed up. My income in the last financial year was around 25k AUD. I want to know how do I declare this capital gain? In which section should I declare it and any supported documents required? I have made contact to an accountant but he said that it was so complicated for him and he refused to help me with the case, so I'm kinda lost atm. Thank you for your help.

Collect bitcoin

vgrower — Thu, 10 Jan 2019 06:33:26 GMT

How can i collect huge bitcoin

Tax on Bitcoin

Feby24 — Thu, 10 Jan 2019 06:32:19 GMT

What if my parents are gifting me bitcoins? Is it taxable when I sell that here and convert it to fiat and receive the amount in my bank account?

Bitcoin from software

Mahmood — Thu, 10 Jan 2019 06:42:22 GMT

How do I show bitcoins I make using btc adder software

Tax on bitcoin earned mining

Mahmood — Thu, 10 Jan 2019 06:48:01 GMT

Hi I am an international student coming to Australia in Nov I want to ask that if I earn bitcoins from any mining software how would I pay tax on it I don't have any experience on paying tax on any money should I go for a accountant
How do I explain ATO about the transaction and money I made and I spend (electricity, software, transcation charges etc) how do I calculate

Taxation on bitcoin earnings

Kissubai — Fri, 24 Aug 2018 09:50:37 GMT

Hi, I bought AUD 1500 dollars of bitcoin through a foreign exchange and trannsferred to website where I play multiply game and win 9000 dollars . I want to sell some bitcoins(satoshi) and keep some balance in my account to keep playing to generate more BTC . Would I be get taxed . Appreciate if anyone clarify my doubts with example.

Just a few tricky scenarios/questions for the ATO

RISCtaker — Wed, 29 Aug 2018 14:42:35 GMT

Hi ATO,

Just a few tricky scenarios/questions for you:

1. The Bitcoin Cash fork occurred on 1/8/2017. If you held X units of Bitcoin on either a cryptocurrency exchange or in a Bitcoin wallet before this date you would have automatically been given X units of Bitcoin Cash. For example, if I bought 1 unit of Bitcoin before 1/8/2017 for $1000 AUD, I would have 1 unit of Bitcoin and 1 unit of Bitcoin Cash after the Bitcoin Cash fork on 1/8/2017. I have 1 question - if I were to sell the 1 unit of Bitcoin Cash for $650 AUD would the cost basis of the 1 unit of Bitcoin Cash be $0 AUD meaning my capital gain for the trade is $650 AUD or would the cost basis of the 1 unit of Bitcoin Cash be $1000 AUD meaning I have made a capital loss of $350 AUD?

2. The cryptocurrency VeChain (VEN), until recently, existed as a ERC20 token on the Ethereum blockchain but the VeChain Foundation decided to create their own blockchain technology with their own cryptocurrency called VeChainThor (VET). During the month of August this year, the VeChain Foundation worked with high profile cryptocurrency exchanges such as Binance to perform a token swap where for every 1 unit of VEN you owned was exchanged for 100 unit of VET. Effectively, the VEN token no longer has any value beyond swapping it for VET tokens. Technically, I have not performed any trade - this scenario would be the equivalent of a company changing their name and diluting every 1 unit of their stock by 100 (for example if Apple diluted their stock in the same way everybody would own 100 times the amount of stock in volume but their stock would be worth 100 times less but they wouldn't have made a capital gain or a capital loss - they could sell all their stock for cash before or after the dilution and get the same amount of cash either way).

I have 2 questions - if I bought 100 units of VEN at $1 AUD each (hypothetical scenario) before the token swap and the price of 1 unit of VEN goes up to $5 AUD each and then the token swap occcurs have I made a capital gain of $4 AUD each per unit of VEN or have I made a capital gain of $0 AUD? Furthermore, now that I have 10000 units of VET after the token swap if I were to sell all my VET for $0.05 AUD each on the market is my cost basis $0 AUD, $1 AUD or is it $0.01 AUD resulting in a capital gain of $0.04 AUD per unit of VET sold?

3. I've bought 1 unit of Bitcoin for $10000 AUD on a cryptocurrency exchange. I decide to move the Bitcoin I've just purchased to my Bitcoin wallet but to do so I must pay a transaction fee in Bitcoin - this is a feature of the blockchain technology that Bitcoin is built on. In this hypothetical scenario the Bitcoin blockchain is being spammed with transactions which means the transaction fee is very high - lets say it's 0.1 Bitcoin just for simplicity sake in this scenario. I've moved my Bitcoin to a Bitcoin wallet underneath my control but I've decided I want to move it to another cryptocurrency exchange but the transaction fee for moving Bitcoin has dropped - it's now only 0.05 Bitcoin. I've lost 0.15 Bitcoin to transaction fees - I've only got 0.85 Bitcoin left. My question is this - are Bitcoin transaction fees considered a capital loss (meaning I've made a capital loss $1500 AUD) or a personal use purchase?

4. I've bought 1 unit of Bitcoin for $10000 AUD on a cryptocurrency exchange. Immediately afterwards I use 0.09 of my 1 unit of Bitcoin to purchase another cryptocurrency. The cryptocurrency exchange charges an exchange fee of 0.01 Bitcoin for the trade. My question is this - are exchange fees considered a capital loss (meaning I've made a capital loss of $100 AUD) or a personal use purchase?

5. I've bought 1 unit of Bitcoin for $10000 AUD on a cryptocurrency exchange. Immediately afterwards I use 0.4 of my 1 unit of Bitcoin to purchase 4000 units of BadCoin. I've made a bad investment decision - BadCoin is no longer being developed and is considered by many online o be a dead cryptocurrency. The cryptocurrency exchange that I originally bought the BadCoin from has de-listed the cryptocurrency removing it from my posession before I could move it off the cryptocurrency exchange. A similar scenario would be the equivalent of the ASX de-listing a company due to it becoming insolvent/bankrupt. My question is this - have I made a capital loss of $4000 AUD?

Regards.

Cryptocurrency

truethat — Thu, 10 Jan 2019 06:50:49 GMT

Dear ATO,

To calculate my capital gain or loss, do I subtract transaction fee and GST on my buy or sell?

As an example:

I bought Bitcoin for $2000 and paid $35.65 as transaction fee and $3.56 as GST so total spend to buy bitcoin is $1960.78

I sold Bitcoin for $2115.05 and paid $38.45 as transaction fee and $3.84 as GST so total amount received is $2072.74

$2072.74-$1960.78= $111.96 gain. Is this calculation correct?

$2115.05–$2000= $115.05 gain. Is this calculation correct?

Can u pls tell?

Thank you

Market Value Substitution Rule

confuzz — Tue, 16 Oct 2018 06:33:05 GMT

Hi there,

I was hoping someone could comment on the following scenario. Jack and Jill are friends. Jack holds an altcoin that he'll only sell to Jill privately for 20% of the altcoin's market value on the open market. Jill pays Jack in bitcoin for the altcoin. Assume the altcoin is sold to Jill for $20 (privately) and is worth $100 (open market).

My understanding is that this scenario involves "not dealing at arm's length" and would trigger the market value substitution rule under the CGT provisions. Let's assume both the altcoin and bitcoin have a zero cost base.

Jack: Disposed of $100 worth of altcoin to acquire $20 of altcoin. E.g., capital proceeds of $100 (altcoin) and a cost base of $20 (bitcoin).
Jill: Disposed of $20 worth of bitcoin to acquire $100 of altcoin. E.g., capital proceeds of $20 (bitcoin) and a cost base of $100 (altcoin).

Is this the correct treatment of the above scenario? I think touched on this in an earlier post, but I wanted to make sure I understand. Thank you to everyone contributing and helping us make sense of it all.

taxable event

thesuperpro — Thu, 10 Jan 2019 06:36:55 GMT

Hi i like to know if you buy bitcoin at in $5000 in may 2018 and it at $5179 in june 2018 when you trade for litecoin at $5179 worth

and you hold that litecoin and at 30/06/2018 and all why thur to 30/06/2019 this is mean you only have to declare $179 as capital gains tax

and no capital gains tax as from 1/7/2018 to 30/6/2019 as the litecoin you buy at $5179 before you tax return had not been traded or disposal

so if this is corrent that mean i only add $179 on my tax bill

this is the way i see it

CFD trading

4218 — Thu, 25 Oct 2018 05:37:43 GMT

Im a wage earner with no other income but for several years I have been tarding CFD's.

Never made a profit but have made losses every year and never claimed anything.

In other community posts I've read that I can claim a deduction for the CFD loss against my other income.

Because I did not know that I could claim the losses and have not claimed the losses in previous years, how far back can I claim the losses?

CFD trading

Mit5 — Fri, 03 Aug 2018 02:34:36 GMT

Hi,

I have read many posts on CFD's and read all the ruling :

http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR200515/NAT/ATO/00001

My fist question is, how often should income from trading be declared? Given that market movements are volatile and income cannot be guarenteed or replied upon, there may be gains one week and losses the next.

I am only trading casually. I have had quite a bit of ecperience trading.

My second question is can losses I have incurred from CFD trading back to 2009/10 be used to offset any profits I am making in 2018/19?

Thanks,

Mit

CFD losses

Pres — Thu, 30 Aug 2018 10:20:20 GMT

I have made a loss from CFD trading. I have established that I am not a business, however I was looking to make a gain, so it is included as a loss. I believe I can claim these losses against other individual unrelated income in my tax retrun. Is that correct? and where do I enter this in the 2018 tax return as I cannot see a releveant section?

Thank you

Where in mytax do we enter CFD trading losses

taxtied — Fri, 26 Oct 2018 13:39:51 GMT

Hello community

I've looked through the previous posts on CFD trading, and have not found the answer to the question of:

where in mytax do we enter losses (or gains) made through CFD trading activity? Many people have asked, but I cannot find the answer.

I've tried entering it as a Deferred non-commercial business loss, under the Business/sole trader, partnership and trust income (including loss details), but it doesn't seem right - it seems to treat the amount as income, and subsequently raises the estimate of my tax payable for the year.

I know it should not be treated as a capital gain/loss - so I know it doesn't go there. By the way I don't have an ABN, I'm just a regular salary earner who trades CFDs regularly (tens to hundreds of trades per year).

Surely someone must have figured it out by now?

Many thanks

taxtied

how to define a loss when trading CFD's

Mit5 — Mon, 29 Oct 2018 22:38:23 GMT

Hi,

I have made a profits after closing out winning CFD trades. I have then lost these profits when closing out other losing trades.

To help illustrate, let's say I have made 10k profit then lost it in the same finincial year.

Am I ablke to claim the 10k as a loss?

Claiming Cfd loss as on offset against income

Hd3911 — Fri, 24 Aug 2018 07:55:57 GMT

Hi,
If I traded CFDs as a business, and made a net loss of $54k, can I claim as an offset against my income?
If my profit from CFD trades closed (excluding losses from trades closed) was above the $20k minimum for the income test, can I offset against income?
Thanks

Tax filing or non-lodgment advice

angorwat — Tue, 10 Jul 2018 11:44:43 GMT

My partner doing the CFD trading for the last 2-3 years, she was doing frequently as a full time trader and no other full time job. She haven't make any profit in the last 2-3 years and make a loss of 12K in each financial year (FY15-16 and FY16-17). She haven't filed any tax return during this time as no profit has been made or no other source of income.

The money she lost is from my taxable income, but the trading account is on her name.

In this case, can you please clarify the below points

1) Do my partner required to file a tax return or non-lodgement advice for FY15-16 and FY16-17 ?

2) Can she show amount lost in the CFD trading as net loss investment ?

3) Or can I show the amount lost in her CFD trading as net loss investment for my tax return?

Capital proceeds

TonyLeCF — Thu, 12 Jul 2018 07:22:13 GMT

Hi,

Let's say I trade on a few exchanges and do 50 trades a day, some exchanges do not provide a price at transaction in the trade history when I buy BTC using AUD.

Can I just use the market value from a reputable australian exchange at the time of transaction?Or is that only for cryptocurrency to cryptocurrency transactions and I will have to go through and do calculations for every single trade and that would be very time consuming?

Thanks

Tricky ICO Question

GarlicGyros — Thu, 30 Aug 2018 03:13:32 GMT

What would we do if we bought an ICO in 2017 which involved a realised gain and then the ICO has significantly delayed release. For example, something that should have come out in May still hasn't come out and isn'tlike to do so until even after October, if at all?

It makes it difficult as in a way that realised gain could have really been immediately followed by a complete loss (scam) in 2017. However, we cannot know even after the October deadline. And how could we even pay tax if we havent received the assets to sell / realise actual losses this year? We don't know if there will be a loss gain or complete write-off.

Calculating capital gains or losses when exchanging one cryptocurrency for another

Klaus — Thu, 10 Jan 2019 06:53:37 GMT

I am trying to understand how to calculate the gains or losses I have to report to the ATO relating to past trades of cryptocurrencies I owned.

Let’s assume I owned ETH. I bought 2 ETH and paid with BTC (exchanged BTC to ETH). I paid 0.3 BTC. After 70 days I exchanged the 2 ETH back to BTC. I received 0.1 BTC for my 2 ETH. That is a loss of 0.2 BTC.

How do I have to calculate the capital gain or loss I have to report to the ATO? The value of the cryptocurrencies in my scenarios below is measured in AUD.

Do I subtract the value of the 2 ETH at the time of sale from the value of the 2 ETH at the time of purchase without putting BTC into my equation at all?

Or, do I subtract the BTC value of the 2 ETH at the time of sale from the time of purchase? Utilizing the value of BTC (representing ETH) only by disregarding the value of ETH.

Or, do I subtract the BTC value of the 2 ETH at the time of sale (because I exchanged ETH to BTC) from the 2 ETH value at the time of purchase?

I tend to believe the last example is the correct way to calculate capital gains or losses but I would like to receive some advice from you.

Kind regards

Klaus

Salary in Cryptocurrencies

ylde — Thu, 10 Jan 2019 06:46:55 GMT

Hi,

As part of my employement package I received ERC20 tokens, ie, cryptocurrencies.

Can you please clarify how I should declare it on my tax return? Is it in the "fringe benefit" section?

I do understand that I'll have to value my tokens in AUD using a reputable exchange.

Thanks.

Bitcoin mined, not purchased. tax or no tax? - that's my question

Newton — Mon, 23 Jul 2018 08:04:00 GMT

Here's my situation, and for the sake of this example let’s say I have 10 BTC. Whilst at Uni studying an IT degree I was intrigued by BTC mining, more for the fun of it as back then BTC where less than $100 each. I built a mining rig, which was half the fun and began to mine BTC - I ended up with 10BTC, I had them with MTGOX, MTGOX went through its upheaval and about 4-5 years ago my BTC where for all intents and purposes lost. I didn’t worry too much about it them, they weren't worth much. Fast forward a couple of years and I listed myself as a creditor in what was now a bankruptcy proceeding - and I was to get approx. $480 USD per BTC, even though now they were worth many thousands of dollars each. Present day and the Japanese lawyers applied for and were granted permission to begin civil rehabilitation for MTGOX creditors, my 10BTC are now worth 10 x $10,000 each.

My dilemma is, I didn't invest in BTC in anyway, I didn't buy any BTC and certainly didn't carry out my activities as an investor. What's my position with respect to paying tax or am I exempt from tax based on the weird circumstances I have found myself in?

Thanks in advance.

Trading as a Small Business

paige — Mon, 23 Jul 2018 18:58:45 GMT

I pay all of my bills using cryptocurrency and also trade. Can these two types of events be separated for tax purposes? Like owning a home for living in and a home for renting, or shares for trading and shares for long term holding. The first $10,000 of personal items are not taxable under CGT so can a percentage of my cryptocurrency, used solely for paying bills, fall into this category?

Also, given that I am likely to be considered a trader by the ATO am I now considered to be running "a small business". If so, do these rulings apply:

Four capital gains tax concessions for small businesses have been available since 21 September 1999.

15-year exemption. Exemption from CGT for an owner who had a small business for 15 years and is selling due to retirement (must be over 55 years old) or due to permanent incapacitation.
50% active asset reduction. Capital gains are reduced by 50% for assets actively used in the business (including intangibles). The normal 50% discount rule for assets held at least 1 year applies too, in that case it is 50% off then 50% off the remainder, for an overall 75% discount.
Small business retirement exemption. When selling a small business and not over 55, CGT is not payable on net capital gains paid into a superannuation fund. There's a lifetime limit of $500,000 on this exemption.
"

With point two I actively use the assets (cryptocurrencies) for trading, paying bills, staking, business promotion, etc, so would like to confirm that this is a correct application.

With points one and two I would like to confirm that the sale of my trading business would also fall under these concessions.

Thanks.

Cryptocurrency Dividends

mudkrab — Fri, 17 Aug 2018 07:33:45 GMT

Hello all,

I am seeking clarity on tax treatment for dividends received from cryptocurrency tokens. As some of you are probably aware, there are businesses who have issued tokens which entitle token holders to regular dividend payments, generally in bitcoin or ether. As most of these businesses are based overseas, I am wondering how the dividends should be treated for tax purposes.

Each time I've received dividends I've used them to buy more of the dividend-paying tokens. Perhaps a reasonable method would be to treat each reinvestment transaction as CGT applicable? E.g. for argument's sake, I receive 0.1 bitcoin and decide to reinvest it. At the time of transaction, 0.1 BTC is worth $10,000 AUD, so I have made a capital gain of $1,000 AUD.

And what if one receives a dividend, and just leaves it there, without converting it to another cryptocurrency or cashing out to AUD?

Thanks.

CFD trading Cryptocurrency, how does it factor into the business of a sole-trader?

treefairy — Thu, 10 Jan 2019 06:43:46 GMT

Hi there i'm pretty new to this concept and entirely new to the idea of running a business.

I take cryptocurrency trading seriously, but I take CFD trading very casually as a hobby like gambling, and have only got losses in my CFD trading on Plus500.

Question one:

Now that I have an ABN for my sole-trading in cryptocurrency exchanges, is my CFD trading swept into that same business?

Question two:

CFDs (contracts for difference) is often leveraged trading where I hold 'contracts' representing assets but I have/hold no real tangible ties to any asset or the market itself, just a company is betting on me failing in my choice represented by the rules they setup (leveraging and closing my positions if I have no balance to cover the loss).

The query is, are CFD trades consider Capital Gains Tax applicable events.

I was playing around with shorting and buying some cryptocurrencies on Plus500, which is how I got into buying real Cryptocurrency Assets, because I kept losing... and felt i'd rather hold the actual thing, so if it goes down a % I don't lose like in leveraging or shorting.

Question three:

Now that I have an ABN can I add my losses from CFD trading on Plus500 against my Capital Gains from trading real cryptocurrency? Is it simple as creating a spreadsheet of my CFD trades, calculating my total loss, and then removing that from my positive (profit) income from Cryptocurrency real trading?

Thanks.

I'm both woried about leaving out my CFD activity if it is relevant and shouldn't be left out if I have an ABN.
But also concerned if I include it, and i'm not meant to.

I'm just not sure what the right thing is to do. Thanks!

Valuing trading stock

Coinflow — Thu, 10 Jan 2019 07:00:10 GMT

If I create my own cryptocurrency/token which costs me next to nothing, i can choose to value it using cost method:

The cost price method includes all costs associated with bringing the stock to its current condition and location. This may include the cost price plus freight, insurance, customs and excise duties, and delivery charges

is that right?

https://www.ato.gov.au/business/income-and-deductions-for-business/reconciliation-activities/accounting-for-trading-stock/valuing-trading-stock/

bitcoin

Calculator — Thu, 10 Jan 2019 06:50:27 GMT

i put $18000 in to bitcoin at $8000 for example and sold at $25000 a bitcoin with a profit of $30000 do i have to pay the CGT and i do work casual at the moment???

Calculate CGT for each transactions?

JaniceK — Thu, 10 Jan 2019 06:28:00 GMT

Hi Everyone,

I'd like to know how to calculate CGT with example below:

17 July 2018 Buy 5 Bitcoin $1000 x 5 = $5000 + $50 Fee -> Total cost base $5050 ($1010 for one Bitcoin)

10 January 2019 Buy 2 Bitcoin $10000 x 2 = $20000 + $200 Fee -> Total cost base $20200 ($10100 for one Bitcoin)

30 May 2019 Sell 1.5 Bitcoin $15000x1.5 = $22.500 + $225 Fee

20 June 2019 Buy 1 Bitcoin $17500 = $17500 + $175 Fee -> Total cost base $17675

Question:

1. At the end of the tax year, for 1.5 Bitcoin sold on 30 May 2019, can we choose either one of those purchased Bitcoin transactions to against at even the 20 June 2019 one?

Let's say if we use the transaction on 17th July 2018:

Cost base = 1.5/5*$5050 = $1515

Selling fee = $225

Capital proceed = $22500

So, Capital Gain will be: $22500 - ($1515+$225) = $20760 and the Bitcoin with that cost base will be 3.5 left

or if we choose the transaction on 20 June 2019 (which is after the selling transaction happened) and 10January 2019:

Cost base (1Bitcoin from 20 June 2019 and 0.5Bitcoin from 10 January 2019)

= $17675 + (0.5/2*$20200) = $22725

Selling fee = $225

Capital proceed = $22500

So, Capital Loss = $22500 - ($22725 + $225) = $450, with no more Bitcoin at 20June2019 transaction and 1.5Bitcoin left for 10January 2019 transaction.

Is this calculation correct?

For any expenses occured during the transfer from Exchange to Wallet for storing for investment, and to sell the cryptos then need to be moved to Exchange, are these fees can be added in the Cost Base proportionally similarly to the purchase fees?

Thanks

borrowing money and cryptocurrency

frosty — Thu, 10 Jan 2019 06:40:47 GMT

hi there,

Can you please help me, I am a pensioner and I borrowed money to purchase cryptocurrency and I cannot find the answers to my questions anywhere relating to borrowings!

1 - what is borrowed money considered for tax purposes? Is the borrowed amount considered an income? Or is it only considered income if you earned more than you borrowed? Every article I read talks about making interest deductions, on the amount borrowed, and it sounds like the whole amount borrowed is actually considered income - whether you make any additional money from that borrowed money.

2 - If I converted cryptocurrency back to aud and withdrew it to my bank account, however this amount was less than the money I actually borrowed (but greater than $10'000 threshold) is this still considered income even if I made losses overall?

3 - How would I reflect this on my tax return?

This is all so confusing so I keep holding off on doing my tax return. I am really worried that even though I have not made a gain at all, just because I withdrew more than $10'000 from cryptocurrency exchange, I will now have to pay the borrowed money back to the bank and pay interest.. and pay capital gains tax on top of that when I did not make a single gain!

If this is not the case - how do I reflect this on my tax return, as my tax return has been flagged as earning a capital gain from investments which is actually not the case.

I would be very greatful for any help you can offer.

Thanks

I had an ERC20 token that was exchanged for bitcoin

marwan38 — Sat, 25 Aug 2018 11:38:23 GMT

Hi, Excuse me if I am asking something that has already been mentioned before. I have gone through a bit of the forum and the main site but I am still somewhat confused to what my situation is.

I have ERC20 tokens which I exchanged for Bitcoin.

Say, for example, I hold 1 BTC which right now is at $9,164 and in this example I used 0.25 BTC in exchange for AUD for personal use.

How would tax be declared in this situation?
Would I declare 1 BTC as tax or is only the BTC->AUD exchange taxed?

SMSF and ICOs

DanielH — Thu, 10 Jan 2019 06:52:42 GMT

Scenario is as follows ABC SMSF has a $200,000 investment in bitcoin uses approximately $50,000 of this is invested in an ICO the payment is made prior to June 30 2018 but the tokens will not be issued until September 30 2018.

How would the trustee justify ownership of the asset being the payment has left the SMSF but no assets haven been recieved by the SMSF and there are no traditional contracts relating the transaction except a reciept for payment and general info on the company's website

Crypto

Anthony — Thu, 10 Jan 2019 06:34:34 GMT

Hi let’s say I invested $50000 into crypto will I get that as tax credit or do I need to actually loose it to get the tax credit? Not I want to lose it

Cheers Anthony

Losses with crypto currency

Shah — Thu, 10 Jan 2019 06:43:11 GMT

Hi there,

I bought $11.5k worth of various currencies. Out of that I invested $7.8k worth of BTC into a scheme (biggest screw up) which turned out to be a ponzi scheme. I lost $7.8k worth of bitcoin. Would I be able to claim the $7.8k loss as a tax deduction?

Crypto question

Anthony — Sun, 04 Nov 2018 09:28:16 GMT

Hi I bought $45000 worth of crypto can I have a tax credit? Reduce my tax by $45000
Haven’t made any profit
Let’s say usually I pay $15000 tax every year will I have 3 years free of tax

Cheers Anthony
Cheers Anthony

Crypto Currency

mitch1994 — Thu, 10 Jan 2019 06:45:40 GMT

Hi,

I have just been to see my accountant regarding my crypto trading over the past year. I have made profit through trading crypto quite regularly, ussualy only holding for a matter of days (sometimes hours). My accountant has come back to me and believes I must be classified as a professional trader, and therefore hasnt taxed my profits as a capital gains. instead he has taxed me as if its my second job and I am a professional trader. Im certainly not a pro, for the most part I just got lucky trading in a rising market.

I would apreciate anyone giving me some insight into this, from what I have read, there is no reason why my profits shouldn't be taxed as capital gains.

Thanks

Crypto fees

10by10 — Tue, 21 Aug 2018 12:37:25 GMT

Hi
So im trying to figure out if i can claim the losses or fees from my crypto trading.
I started trading october 2017. Over the next 5 months putting in approx 27k and withdrawing 11k. Portfolio value at 30/6/18 was approx $5k. Resulting in an operating loss of approx 11k.

Alot of trading was performed when the portfolio was valued at 10x, during this time i performed hundreds of trades to accrue 16k worth of trading fees alone

So my trading fees were approx 16k and losses approx 11k for 2017/18 financial year. Can i use either of these fees or losses as deductions to reduce my personal income for 2017/18?

mining cryptos

thesuperpro — Wed, 07 Nov 2018 07:12:12 GMT

HI i like to know if i mine crypto and i mine $200 worth and your value is $1000 at end of june 30 how much tax i pay on this even if i never dispoal or traded it or if i send it to a another wallet on exchance does this incur a taxable event or not even that it still in same currantcy but send to different wallet and both wallet registed under you own name

or i only pay tax if i withdrawn it

Crypto currency

Bec — Thu, 10 Jan 2019 06:32:57 GMT

I spent $500 investing in crypto currency about a year ago. It is now worth about $20! Do I need to declare this for tax? Thanks.

Crypto to Crypto Trades: Capital Gain Tax

mattalk — Thu, 19 Jul 2018 10:51:24 GMT

Hi Everyone,

Thanks for everybody who's contributed in these forums. It's all incredibly useful information.

I have been reading on here for quite a few months, trying to understand the taxation rules related to Crypto.

Whilst there is no doubt that any profits made from Cryptocurrency trading are taxable, throughout the last year, myself and many others have wondered what the tax implications were for Crypto to Crypto trades. There has been quite a bit of confusion on this matter, even here on this forum.

I have just been pointed to new guidelines on this matter, which were posted on 29/06/2018 (or so I believe, based on the last modified date):

https://www.ato.gov.au/General/Gen/Tax-treatment-of-crypto-currencies-in-Australia---specifically-bitcoin/?anchor=Transactingwithcryptocurrency#Transactingwithcryptocurrency

In summary, this acknowledges that Crypto to Crypto trades are fully taxable for CGT.

Honestly, this is sudden choas. I have been trading since November 2017, and have made plenty of profits through 10+ trades between cryptos (the market was booming, it's really not because I'm a sophisticated investor). When the market started to dip in Jan 2018, I stopped trading. Currently, my portfolio is not worth much due to the heavy losses.

To clarify:

- Throughout my entire trading experience, I have not sold anything to AUD. Just bought from AUD to Crypto.

- I maintained a detailed spreadsheet with all my trades, per the guidance from the ATO at that time. But of course, if you use something like Etherdelta and whatever Chinese exchanges, how accurate is all this complex data?

The year has ended, and now we suddenly have these new rules. How can this be fair? Should I have known that these were the tax implications, I would've planned my trades differently (and kept them locally for credible tracking). I am now one small step away from a financial meltdown.

It's as if I unknowingly took a significant amount of risk.

I have reached out to an accountant, and they asked me to see another accountant, as they have no experience in this field.

I would be keen to know if any one else is in this situation, or may have some advice on this matter. I have a feeling that I'm not alone.

Apologies for the rant. I'm so upset.

Trading Crypto & Tax

Zeevex — Tue, 28 Aug 2018 14:49:51 GMT

OTYHello,

So here's my situation, I earn less than taxable bracket (18,200) in fiat.
I first bought crypto starting November, in small quantities and all the way through the beginning of this year (2018)
upon June I ended up running at a loss of $1000 by end of tax year.

So now that it is a new tax year. does it begin from what I've totally spent on crypto($5000) or starts from what it was at beginning of tax year($4000), regardless of loss?
for example in the 2018 tax year, spent $5000 over the tax year and ran at a loss of $1000 total equalling $4000 by the end of a tax year.
in the 2019 tax year will any profit from the $4000 mark be seen as taxable? or from my original purchase price of $5000?

thanks in advance,

Tax on crypto

thesuperpro — Thu, 10 Jan 2019 06:37:24 GMT

Hi i like to know if buy bitcoin at $3000 par coin and it skyrocket to $50000 a coin do i have pay CGT on it even if i am not selling it

what i read up on online is that you only pay CGT on $47000 if you sell it to AUD

do i still pay CGT of $47000 if i have not sold it

and if bitcoin crashes to $10000 do i still have pay CGT on $47000 or only $7000

even if not sold

crypto investments only

frank123 — Sun, 29 Jul 2018 21:39:48 GMT

Hi Guys,

I am newbie to crypto and started investing when there was the start of dip on january 2018. Till now I have invested $10k and never sold any coins for DOLLAR. My current balance is $3k. SO in this case, why lodging the tax return, what provision should I be following. Since I have the loss, do I need to mention any dedections and how much deductions should I mention.

Any help would be appreciated.

Thanks heaps amigos.

Capital Gains Tax on Crypto currency

Rocketrod — Wed, 18 Jul 2018 06:28:56 GMT

Hi,I have been struggling to find an answer to this topic.

If I make an investment in crypto, say $50,000, that crypto investment goes up to now be worth $1,000,000.

To my understanding I will be up for CGT on 950,000?

That is calculated on my own tax rate, obviously it will put me in the highest tax rate bracket?

Is it true that if i hold for 12mths that tax is halved?

Is there any point in time where cgt will not be payable. 2 years, 3 years etc?

I also have read that if i was to sell some of the crypto to buy a car for example cgt woldnt be payable on that? If that is true if i was to sell the crypto to buy a house would that be treated any differently?

Thankyou

ERC 721 tokens - Crypto Collectables

DanielH — Tue, 04 Sep 2018 01:00:38 GMT

I'm raising this issue now as I feel it is going to become amore frequent question over the coming yeras

An ERC 721 token is a unique smart contract based on the Ethereum network due to the way these tokens can be created with unique attributes a new class of crypto based collectables has started to appear in various markets for trading. Cryptokitties, cryptobots and Gods Unchained being a few examples one single Gods Unchained Card/token was auctioned for over $60,000 earlier this year. So will these fallunder the banner of traditional collectables and will the CGT collectable rules apply?

Cost base some of these tokens are sold in packs similar to trading cards hence for my purchase I may get 5 of these tokens is the cost base of the pack attributed equally to each card or can I aportion the cost base on a reasonable basis such as the rarity of each card obviously rarer cards have a far higher resale value.

Cost base dillution or nil cost base and rollovers on newly created assets: some of these tokens can be interact to create new tokens , Gods unchained for example i can combine 5 normal cards of the same type to create a shadow card so in this case I would assume all the cost bases of the initial cards roll over to form the cost base of the shadow card ?

Then there are tokens like crypto kitties were a new smart seperate contract is created by the interaction of two other smart contracts ( getting confusing yet). On face value I'd assume the same treatment as a chain split/fork where we have zero cost base on the new asset but would like confirmation.

Finally I'm considering starting a business selling and farming these assets I assume such activity would be regarded as ordinary business income

Paying a Franked Dividend in Crypto

DanielH — Thu, 10 Jan 2019 06:49:25 GMT

Nothing too complex on this one

ABC PTY LTD has $2million in cryptocurrency Assets and has reported profits of $100,000 and $50,000 for the last 2 years

Franking Account Balance $41,250

Cash Assets $5,000

ABC PTY LTD wants to pay a dividend of $45,000 is it possible for the dividend to be paid in the equivalent value of cryptocurrency what are the tax implications to the company

n.b earnings of ABC pty Ltd are made from business activities related to cryptocurrency trading, mining and OTC brokerage

CGT Event on CRYPTO Please explain clearly

libraswkp — Sat, 21 Jul 2018 02:28:24 GMT

ATO says: You generate a ‘CGT event’ every time you trade a cryptocurrency.

Ok. Understood. But ATO never explains how to calculate the tax. People like me and many want to pay proper tax on crypto but there is no explanation on ATO or none of the tax agent sounds confident on Crypto matters.

Can someone please explain what happens in this scenario?

Suppose I buy few ADA coins for 1 ETH in Aug 2017 when ETH was say 600AUD. Sell all ADA in DEC 2017 and get back 2 ETH.

So I have capital gain of 1 ETH. This is CGT event.

I do not sell this 2 ETH. But keep it.

DO I pay tax on 1 ETH? Answer is YES. But how much is the question

As per example price I will add 600AUD to taxable income. and pay taxes on July 30th 2018. Say I've paid 180AUD in tax for this 1 ETH profit worth of 600AUD. Remember I have not sold this 1 ETH.

In September 2018, I still have that 1 ETH. But its price dropped to 200AUD. I need money urgently so I sell the ETH for get 200AUD. Does it mean I've paid 180AUD in tax for a profit of just 200AUD??

Or how do I adjust this overpaid tax it in next year.?

What do you all think of above scenario??

The only clean solution to this is ATO to start accepting tax in cryptocurrency for cryptocurrency matters. So in above example I will simply pay 0.3 ETH in tax to ATO's ether account. It is so simple this way.

OR ATO simply taxes once crypto is converted back to AUD.

Also not sure how ATO views crypto losses due to exchance hacks, coins getting de-listed from exchange etc.

IF ATO wants proper tax on crypto, I expect them to explain such scenarios and tell how exactly tax is calculated in above scenario.

By just saying each inter-crypto exchange is CGT event does not help in anyway.

Can someone please answer the above scenario??