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Re: Capital Gains Tax On Bitcoin/Cryptocurrency Clarification

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The tax treatment on cryptocurrency you linked states that trading is also subject to tax and gains/loss must also be calculated for that financial year. I think what OP is trying to say is if for a particular financial year a person has traded an amount to let's say $1million AUD gains and his annual salary is $50k, he has no option at that point but to sell some of that cryptocurrency into fiat in order to pay tax.


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Hey ATO,


Say, for example, I was to buy and sell all my crypto currencies within the same finincial year and convert to fiat, would providing a total of my profit/loss in fiat be sufficient? The logic I am using is that this total profit/loss would be a summation of all my individual trades (gains/losses). 


Also, would selling on June 30 and re-buying on July 1 lead to any issues?




Former Community Support

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Hi @DarthTrader,


Thanks for your questions! Cryptocurrency is considered to be a capital gains tax asset for tax purposes, rather than a form of currency. This means that you need to calculate your capital gain or loss every time you dispose of a cryptocurrency asset - whether you exchange one currency for another, gift it to someone else or 'cash out' into fiat currency.


You'll need to keep detailed records of your cryptocurrency transactions to help you calculate your total capital gain or loss, including the dates of transactions, the value in AUD and what the transaction was for. How you calculate your capital gain or loss is up to you - you can use the CGT tools in myTax via myGov if you lodge your return yourself, hire the services of a registered tax practitioner to lodge your return for you or use the worksheets available in our guide to capital gains tax to help you figure it out. Whichever method you use, you'll need to keep your documentation for up to five years after you dispose of your capital assets.

Finally, the trading and/or selling of your cryptocurrency is up to you - you may choose to dispose of your cryptocurrencies on 30 June and repurchase after this date. However, it may be worthwhile considering whether there are any capital gains tax implications to your decision. You  may choose to contact a registered tax practitioner to discuss your overall financial position - find registered practitioners in your area by searching the Tax Practitioner Board register.


Hope that helps!


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If I bought 1 BTC for 8000AUD, then spent .1 BTC on 9 different coins at different times, then sold those 9 coins back to 4 different currencies, then sold those to 4 different coins each, then sold some back to bitcoin... then I bought some more alt-coins with the bitcoin I had on that exchange, which bitcoin am I selling to determine my CGT ? The bitcoin I got from selling 20 different coins 2000 different times, or the bitcoin I had left over from the 1 BTC I originally bought?

And if I am selling both some of the .1 BTC I had left over from the original 1BTC, + the bitcoin from 20 different coins being transacted over 2000 times before this new alt-coin purchase, how do I determine the CGT just on this new purchase?

And if I then trade again, 12% of that alt-coin to ethereum, in a weeks time, the profit is 12% of what I paid for that alt-coin + compared to the ammount of ethereum I am buying and its price? Is this a complicted way of figuring out whether my altcoin has increased in value over the space of time from buying it and selling 12% of it to ethereum? 

One question is from my rational brain that thinks it gets it and the other former question is from my main brain that wants to die.

The irony in all of this, is that I want to use money made from cryptocurrency which I understand, to help me do one of the only jobs in australia people pay to get bossed around and work... which is being a student. Which is money I will probably never be getting back as an art student, unless I feel overly inspired and not very stressed out. Everything I buy with my cryptocurrency 'profit', will be taxed... but it is not in the ATOs interest to make trading easier for people and thus more profitable? By having this explained in simpler terms?

What do I need to do to fill in my tax return properly, so you can tax me for money i've brought into Australia from the global cryptocurrency boom, currently the hottest space in innovation, technology and futureproofing AI.

Thank you!


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"Do not include capital gains that are disregarded, deferred or reduced, or capital losses that are disregarded; see Exemptions and rollovers."

I think my soul just left my body.


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I feel you. The tax laws are absolutely designed to crush any hope you have of financial freedom. A simple system of fiat into the crypto realm and crypto back to your bank account, would help us to not only generate personal wealth but also tax revenue and become less dependent on the welfare system going forward. Unfortunately, the government wants to reach it's tentacles into every move you make in crypto and take tax from you at every turn, destroying the effect of compounding and discouraging you from learning to trade better. If the ATO is reading this, I am sorry but that's how I feel about it. Your system isn't fair and oppresses your citizens instead of working together as a team.