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Ethereum 1.0 to Ethereum 2.0

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Hi ATO,

 

Could you provide guidance on the approach to be taken for this forthcoming event. There are mutliple theories best explained in this reddit thread as to how the IRS is likely to treat this event:

 

https://www.reddit.com/r/ethtrader/comments/cnt9rv/eth_20_is_going_to_be_a_tax_disaster_heres_why/

 

My concern is that the ATO may treat in a similar manner to the BTC/BCH fork, but this scenario is different in that those who elect to "convert" ETH 1.0 to ETH 2.0 in effect destroy their ETH 1.0 coin, which if treated as a CGT event may result in a loss greater than the original purchase price - which is a concept that is illogical. I would be interested in whether the ATO has guidance in relation to this particular fork ?

 

Regards

Roger

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Hi @RogerRamjet,


Thanks for your patience whilst we reached out to a specialist area, please find the response below:


Because this fork is still some time away and we don’t have all the details about how it will be implemented, we can’t currently say how the ATO view will apply. We’ll watch to see how the scenario progresses, and if needed will issue guidance material for Australian taxpayers. In the meantime you can view our existing advice on the tax treatment of cryptocurrencies at ato.gov.au/cryptocurrency.


I hope this helps @JodieM
 

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Hi @RogerRamjet,


Welcome to ATO Community and thanks for your post! We have reached out to a specialist area and we will come back to you asap.


Thanks @JodieM

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Hi @RogerRamjet,


Thanks for your patience whilst we reached out to a specialist area, please find the response below:


Because this fork is still some time away and we don’t have all the details about how it will be implemented, we can’t currently say how the ATO view will apply. We’ll watch to see how the scenario progresses, and if needed will issue guidance material for Australian taxpayers. In the meantime you can view our existing advice on the tax treatment of cryptocurrencies at ato.gov.au/cryptocurrency.


I hope this helps @JodieM