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SomePerson(Enthusiast)Enthusiast
27 May 2021

The ATO stipulations are quite clear when it comes to regular cryptocurrency trades. Each time one crypto is traded for another, or when crypto is traded for fiat, that's a taxable event.

What I'm not sure about is if that same approach applies to trading crypto futures contracts?

Consider the scenario where we buy 1 BTC and transfer it over to Binance.

We then place multiple active trades over the course of a week on the BTCUSDT futures instrument, and end up with 0.1 BTC of profits, for a total capital of 1.1 BTC.

Is that 0.1 BTC of profits now taxable income on the year that it was generated? Or will that 0.1 BTC of profits only be taxable when it's eventually sold at a later date?

6,797 views
3 replies
6,797 views
3 replies

Most helpful response

Most helpful reply

RichATO(Community Support)Community Support
31 May 2021

Hi @SomePerson


The answer is it could be either of the options you list - a capital gain OR a taxable profit. Which one it is depends on your activity and whether you are investing or trading in crypto.

It's the same way we approach share related activity. You are either running a business as a share trader or you are a share investor.


You might find this article will help you decide for yourself whether you are a trader or an investor.


RichATO

All replies

Most helpful reply

RichATO(Community Support)Community Support
31 May 2021

Hi @SomePerson


The answer is it could be either of the options you list - a capital gain OR a taxable profit. Which one it is depends on your activity and whether you are investing or trading in crypto.

It's the same way we approach share related activity. You are either running a business as a share trader or you are a share investor.


You might find this article will help you decide for yourself whether you are a trader or an investor.


RichATO

drdth(Initiate)Initiate
10 Sept 2023

Hi,

Thanks RichATO


So if an individual is a trader (day trading, following news, using technical analysis etc.) with their own funds in order to make profit, and let's say they:


  1. Pay 100 USDT (equivalent to AUD160) for a perpetual futures contract in BTCUSDT.P of some quantity
  2. Close the contract and get 110 USDT back into my wallet, equivalent to AUD 180

Then this would be AUD 20 to be reported as income ?

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Tax on cryptocurrency futures contracts | ATO Community