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Can I use cryptocurrency to buy goods and services?

Newbie

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Replies 3

Hi,

 

I am a registered business. I don't invest or trade crypto. Can I use cryptocurrency to buy goods and services for my business operations? How would GST apply for the seller in this situation? And myself as the buyer, will it be counted as a normal expense and be tax deductible? If yes, how much in Australian dollars would the expense be? Would it be using the  current price of the cryptocurrency or the price I purchased the cryptocurrency at?

 

 

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Taxicorn

Replies 0

@rubixcube 

The normal Trading Stock rules would apply not CGT.

 

Your expense was 45K

 

You purchased something using that 45k. (expense to be deducted)

 

You were left with 2k of crypto, that's an increase in your trading stock's value over the year is assessable income.

 

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Newbie

Replies 1

Thanks for the response. 

Looks like the cryptocurrency purchased for the purposes of paying a service provider would be treated as normal money and would be an expense for my business.

 

Should I claim the expense amount to be the current dollar value of the crypto or the dollar value I purchased the crypto for?

Example:  Purchased 1 crypto coin for AUD 45000. When making payment to the service provider the value of that one coin was AUD 47000.

 

Should I claim an expense of 47k or 45k? 
my thinking is that I pay CGT on 2k capital gain, and claim tax deduction on 47k expense.

 

What do you think?

Most helpful response

Taxicorn

Replies 0

@rubixcube 

The normal Trading Stock rules would apply not CGT.

 

Your expense was 45K

 

You purchased something using that 45k. (expense to be deducted)

 

You were left with 2k of crypto, that's an increase in your trading stock's value over the year is assessable income.