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boonie(Initiate)Initiate
27 Oct 2021

Hi, I like this question and answer and will follow its advice: https://community.ato.gov.au/s/question/a0J9s0000001INFEA2/p00046931?referrer=a0N9s000000DacDEAS A common scenario & context for two questions: As an investor, I use an Australian crypto exchange which controls the crypto for me. It has provided me a nice transaction report for the financial year. So i can identify transaction details down to the second and eight decimal places on the crypto amounts, no problems. The exchange gives me control of an AUD account and a BTC account. When I buy BTC it doesn't go into my crypto wallet (i don't have one), it sits in my BTC account on the exchange. Any underlying block-chain wallet involved is owned by the exchange - I never see that wallet. I emailed and asked about it. They were quite clear. Question 1: Just to clarify, does make any difference to ATO guidance on Capital Gains Tax if I never used a proper crypto wallet or had real control over any 'individual crypto currency' coins/tokens? ('individual crypto' seems to be the catch phrase used on a lot of these advice pages.) I understand that when I 'sell' from the BTC account back to the AUD account (still on the exchange) then those are the CGT events that the ATO is interested in. Everyone is a winner. This year I have a dozen transactions back and forth between my AUD account and BTC account but none of the amounts match up. So I'll do my best to pair-up 'buy' and 'sell' transactions, since it sounds like the Average Cost Basis method is a no-go (linked question and answer at the top). But none of the BTC amounts match cleanly, so I'll need to breakdown the BTC->AUD 'sell' transfers into smaller imaginary transactions, so they can be re-assembled and summed to line-up with the amount of any previous AUD->BTC 'buy' transfer. Question 2: Is that what the ATO wants to see, with an emphasis on the 'buy' orders being maintained as whole 'individual' items? (and every second 'sell' order reduced to atoms.)

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823 views
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RichATO(Community Support)Community Support
30 Oct 2021

Hi @boonie


You definitely have the right idea about demonstrating the right records related to your bitcoin transactions.

The key information we expect an investor in cryptocurrency to be able to produce about their crypto transactions on request is:

  • the date of the transactions
  • the value of the cryptocurrency in Australian dollars at the time of the transaction (which can be taken from a reputable online exchange)
  • what the transaction was for and who the other party was (even if it’s just their cryptocurrency address).

It's also important to avoid errors related to capital gain or loss calculations by:


  • Deduct capital losses in the same year they occurred. Carry forward net capital losses to later income years to offset future capital gains.
  • When transferring cryptocurrency from one wallet to another, it is not considered a CGT disposal if ownership of the coin is maintained.
  • Get the cost base right by including things like brokerage fees, transfer costs, platform costs, borrowing expenses, interest on loans and legal fees.


All replies

Most helpful reply

RichATO(Community Support)Community Support
30 Oct 2021

Hi @boonie


You definitely have the right idea about demonstrating the right records related to your bitcoin transactions.

The key information we expect an investor in cryptocurrency to be able to produce about their crypto transactions on request is:

  • the date of the transactions
  • the value of the cryptocurrency in Australian dollars at the time of the transaction (which can be taken from a reputable online exchange)
  • what the transaction was for and who the other party was (even if it’s just their cryptocurrency address).

It's also important to avoid errors related to capital gain or loss calculations by:


  • Deduct capital losses in the same year they occurred. Carry forward net capital losses to later income years to offset future capital gains.
  • When transferring cryptocurrency from one wallet to another, it is not considered a CGT disposal if ownership of the coin is maintained.
  • Get the cost base right by including things like brokerage fees, transfer costs, platform costs, borrowing expenses, interest on loans and legal fees.


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Liked by boonie
boonie(Initiate)Initiate
6 Nov 2021

In the end I wasn't able to completely prevent the buy transfers from being broken down into imaginary buys, because I had to match up with the exact sell amount each time there a was a transfer that counted as a sell. But I got there in the end. When I say imaginary, I mean "imagine if a particular transaction in my history had been done in 2 or 3 smaller chucks on the same day, same total cost base and same total amount of crypto. Imagine how much easier that would have made it to calculate my capital gains, because those smaller amounts would fit exactly with the amounts in other transactions, enabling discrete buys & sells events to be pair-off as required."

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how to individually identify crypto from piecemeal intra-exchange transfers | ATO Community