Hi,
Trying to understand CGT on crypto.
If I buy 10 BTC for $100 and in 2 weeks those 10 BTC are worth $300 will I have to pay any tax if I with draw the initial amount I invested ($100) and leave the remainder on the exchange ?
I technically havent made a profit, just selling the money I initially used to purchase the BTC.
Hi @Sami007,
Each parcel of cryptocurrency is a separate asset for tax purposes. This means that although your overall profit from the amount you have invested has "broken even", your individual cryptocurrencies have become a profit.
In your example, you buy 10 BTC for $10 each. You later than sell roughly 3 BTC for $30 each. This means you have made a profit, even if you've invested in more BTC than you "cash out".
This means you'd be liable for capital gains tax on the difference between the cost base of each BTC versus the withdrawal value.
You can read more about Calculating your CGT on our website.
Hi @Sami007,
Each parcel of cryptocurrency is a separate asset for tax purposes. This means that although your overall profit from the amount you have invested has "broken even", your individual cryptocurrencies have become a profit.
In your example, you buy 10 BTC for $10 each. You later than sell roughly 3 BTC for $30 each. This means you have made a profit, even if you've invested in more BTC than you "cash out".
This means you'd be liable for capital gains tax on the difference between the cost base of each BTC versus the withdrawal value.
You can read more about Calculating your CGT on our website.
I highly recommend services such as Koinly.io (pay a modest fee for each year's tax return) and CoinTracking.info (less user friendly). You can link them to your Crypto exchanges and it will automatically calculate your return for you.
These are essential if you do any substantial transactions because it gets very complicated with multiple prices per transaction (e.g. 1 BTC might be sold in smaller lots of 0.3, 0.4, 0.2, 0.1 at different prices over 1 hour as your trade progresses), and given that most exchanges work in $US rather than $AU.
Cheers,
Nigel
Hi Guys, what you think about this project Neptune Mutual. I read a lot about it but still wondering whether its a good decision to put one thousand dollars into it or not.
Hi @joshua98,
Whilst we have personal opinions on investments, we cant advise you what to invest in. Although some community members may be able to do just that. There are other forums on the website that engage in discussions around investing and the pro's and cons of the chosen investment. You can of course post your question where you feel it's relevant.
I hope some of our community members get back to you on this. Meanwhile our Moneysmart website does advise on financial matters and you can also view our requirements when investing in a CGT asset and transacting with cryptocurrency via these links.
All the best with it.
Hi Jodie, asking here instead of posting a new question as I believe this is related.
For crypto disposed of after 12 month of holding (traded from one asset to another), eligible for a 50% discount on capital gains. Which would be the most appopiate discount code to use from this link: https://www.ato.gov.au/Individuals/myTax/2021/In-detail/Capital-gains/?=redirected_myTax21CGTExemAndRollover&anchor=CGTexemptionandrollovertypecodes#CGTexemptionandrollovertypecodes
Hi @James66
I don't believe you need an "additional discount code" or other exemption. Just apply the 50% exemption to the taxable income if you've held it for more than 12 months.
This CGT tool might help: https://www.ato.gov.au/Calculators-and-tools/Capital-gains-tax-record-keeping-tool/
Cheers,
Nigel
Awesome thanks. So simply need to put my capital gains in. Then in the net amount subtract any capital loss/ 50% discount?
Yeap exactly... Check out Example 12 (for shares) here, which is fairly equivalent:
Just remember to convert it all to Australian dollars on the CGT event date (crypto => $USD => $AUD, or crypto => $AUD directly).
Cheers,
Nigel
Awesome, yep using a program to get all the trades for tax purposes so that should be all good. I have not got the paid plan so I need to go through the transactions and find out all the capital gains and then subtract capital loss, then divide by the discount.
Just watched this, it was really helpfull and even showed what fields to fill out on the tax screen in what scenario.
https://www.youtube.com/watch?v=f9iZdeMIbTE&t=2525s
Hi @James66,
Thanks for your update.
That is correct, report your Total capital gain at the Total capital gain label.
Thereafter apply your losses, if you have a remainder amount and the CGT assets were held 12mnths you can apply the CGT discount.
This new figure is reported at the Net capital gain label.
If you have further questions please let us know
Yesterday I came across some interesting old thread where ATO basically ruined some skilled traders life. Or at least it sounded like that. I dont know how it resolved and still the case. If that still the case, Everyone in Australia should be so worried about crypto trading as a job.
Here was the scenario that thread discussed.
Trader swap A to B crypto and gain net capital value of $3000.
Ovet the months, trader execute 100 of these swaps with same unrealised net capital gains.
Then crypto market value drop by 80% and but as per ATO trader has earned $300k per year!. Trader has to pay income tax on AUD he/she never had. So how do the trader find AUD to pay tax bill? I hope that case was resolved with common sense and good faith.
Hi @lannisterjunior,
We appreciate the feedback you provided.
While we are able to provide information and rules around capital gains tax for traders and investors, we do not advise, nor should we, in what to invest in.
Ultimately it is up to the person to consider the pros and cons of where to invest their money when transacting with crypto.
I too hope this person is doing well, and hopefully the market went up again.
15 Apr 2026 · 8 min read time
4 Dec 2023 · 9 min read time
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