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If I put $10,000 into cryptocurrency and I make another $10,000, is the $10,000 of profits assesable income when I withdraw it? (if it is from a profit-making undertaking)
Initial investment (amount in): $10,000
Amount WIthdrawn (amount out): $20,000
Expected assesable income: $20,000 - $10,000 = $10,000
If I then put $5000 back in after withdrawing the $20,000, is the assesable income now only $5000? As the total amount in is $15,000 and the total amount out is $20,000.
Expected assesable income: $20,000 - $10,000 - $5,000 = $5,000
23 March 2018 05:28 PM - edited 24 March 2018 10:53 PM
A profit or loss is made when you realise it and in this case it is when you sell your bitcoin and withdraw it.
The re-investment of $5,000 is simply another capital injection just like when you purchased the first lot of $10,000 and is not deductible from any profit you may have made on your first transaction.
think of it as similar to share trading.