What position does the ATO take on crypto losses via a scam? Specifically, how is the value of the loss included in the portfolio position at the end of the financial year?
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Hi @Interested26,
Where a crypto asset is lost through a scam, the tax treatment is generally similar to a loss due to theft. In these situations, you may be able to claim a capital loss, provided you can show evidence that you owned the crypto and that you’ve lost access to it.
At the end of the financial year, you wouldn't include the value of crypto that’s been scammed in your portfolio, as you no longer hold the asset. A capital loss is generally claimed in the year you became aware that you’d lost access to the crypto. The amount of the loss is usually based on the asset’s reduced cost base, which is often what you paid for it.
Capital losses can be used to offset capital gains in the same year or carried forward to offset capital gains in future years, but they can’t be used to reduce other income like wages or salary.
If you later receive any compensation or an insurance payment relating to the scammed crypto, this will reduce the amount of any capital loss you can claim.
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Capital loss. CGT event occurs when the loss is discovered.
CGT events | Australian Taxation Office
Calculate capital loss and enter into tax return.
Hi @Interested26,
Where a crypto asset is lost through a scam, the tax treatment is generally similar to a loss due to theft. In these situations, you may be able to claim a capital loss, provided you can show evidence that you owned the crypto and that you’ve lost access to it.
At the end of the financial year, you wouldn't include the value of crypto that’s been scammed in your portfolio, as you no longer hold the asset. A capital loss is generally claimed in the year you became aware that you’d lost access to the crypto. The amount of the loss is usually based on the asset’s reduced cost base, which is often what you paid for it.
Capital losses can be used to offset capital gains in the same year or carried forward to offset capital gains in future years, but they can’t be used to reduce other income like wages or salary.
If you later receive any compensation or an insurance payment relating to the scammed crypto, this will reduce the amount of any capital loss you can claim.
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