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Do I Pay Capital Gains Tax on Crypto-to-Crypto Swaps?

Newbie

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Hi, thanks in advance for your help!

 

Here's my example. If I purchase $100 worth of Bitcoin with the intention of immediately swapping it on an exchange for CoinB, do I pay a tax on that swap? I assumed there would be no tax to pay on this event as they would both be worth virtually the same amount in AUD at the time. Am I only taxed if I sit on the Bitcoin for a while, let it increase in value, then buy CoinB?

 

Thank you!

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Most helpful response

ATO Community Support

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Hi @Giselle1

 

It depends on if you're an investor or a trader (running a business).

 

If you're a trader, you aren't liable for capital gains, since your crypto becomes your trading stock.

 

If you're an investor, you'll be liable for capital gains tax on any gains you make on the disposal of each individual asset. This means that when you dispose of the Bitcoin, you'll be liable for CGT on that gain, even if it's a small amount.

 

You can read about exchanging cryptocurrency for another cryptocurrency on our website.

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @Giselle1

 

It depends on if you're an investor or a trader (running a business).

 

If you're a trader, you aren't liable for capital gains, since your crypto becomes your trading stock.

 

If you're an investor, you'll be liable for capital gains tax on any gains you make on the disposal of each individual asset. This means that when you dispose of the Bitcoin, you'll be liable for CGT on that gain, even if it's a small amount.

 

You can read about exchanging cryptocurrency for another cryptocurrency on our website.