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_candle426(Newbie)Newbie
14 Mar 2021

Hi, hoping someone can assist with answering this question on the disposal of ETH to pay for gas (transaction fees on the Ethereum network).

Let's assume I am an investor and I purchased 1 ETH six months ago for $1,000 and the price of ETH today is $2,000.

If I use this ETH to pay for gas today, I understand this triggers a CGT event. My question is, when calculating the CGT on this do I assume I have disposed of the ETH at $2,000 (therefore a capital gain of $1,000) or at $0 (capital loss of $1,000)?

Thank you

1,988 views
5 replies
1,988 views
5 replies

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Most helpful reply

JodieR_ATO(Community Support)Community Support
17 Mar 2021

Hi @candle426,

Expenses associated with buying, owning and selling CGT assets are included in the cost base. If gas expense was $2000 total, how much of this is related to selling one coin? You may need to apportion the gas expense, thereafter deduct the final cost base amount away from your $2000 capital gain.

Capital gains are reported at capital gain (TOTAL) label. If held 12mnths minimum you can apply CGT 50% discount, this is reported at your (NET) capital gain label. We apply marginal tax rates to the (NET) amount.

If you have a loss to report, include it at capital loss carried forward label. This is reported each year until you have a capital gain to offset it with.

You can use the links for further assistance.

Links-

Cost Base

Working out your capital gain or loss.

myTax capital gains 2020, just an FYI for reporting.

All the best.

All replies

Most helpful reply

JodieR_ATO(Community Support)Community Support
17 Mar 2021

Hi @candle426,

Expenses associated with buying, owning and selling CGT assets are included in the cost base. If gas expense was $2000 total, how much of this is related to selling one coin? You may need to apportion the gas expense, thereafter deduct the final cost base amount away from your $2000 capital gain.

Capital gains are reported at capital gain (TOTAL) label. If held 12mnths minimum you can apply CGT 50% discount, this is reported at your (NET) capital gain label. We apply marginal tax rates to the (NET) amount.

If you have a loss to report, include it at capital loss carried forward label. This is reported each year until you have a capital gain to offset it with.

You can use the links for further assistance.

Links-

Cost Base

Working out your capital gain or loss.

myTax capital gains 2020, just an FYI for reporting.

All the best.

_candle426(Newbie)Newbie
17 Mar 2021

Thanks Jodie. In my scenario I was assuming that the ETH had been used for transaction fees only and no coins had been sold. For example, if I send ETH between two personal wallets this incurs a gas fee payable in ETH which I understood represented a CGT event in respect of the ETH used for gas.

Based on your response I gather this is incorrect and instead the value of the ETH used for gas (where "value" = the market value of the ETH at the time the gas was incurred) is added to the cost base?

Thanks

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Calculation of CGT on disposal of ETH to pay for gas | ATO Community