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Re: How does crypto to crypto work with a loss both before and after swaps?

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Hi all, 

this is from the ato example for crypto to crypto trades.

 

On 5 July 2017, Katrina acquired 100 Coin A for $15,000. On 15 November 2017, through a reputable digital currency exchange, Katrina exchanged 20 of Coin A for 100 of Coin B.

Using the exchange rates on the reputable digital currency exchange at the time of the transaction, the market value of 100 Coin B was $6,000. For the purposes of working out Katrina's capital gain for her disposal of Coin A, her capital proceeds are $6,000.

 

Real world example here:

1/Buy MTL/AUD incl fees for $50 aud 

2/Swap MTL/DATA inluding fees now worth $41.51

3/Swap DATA/WAXP including fees now worth $40.36

all swaps were 100% holdings of that particular crypto for crypto, with a loss of $9.64 at EOFY.

I have no idea what the ato wants me to do here

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Initiate

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Hi @hack 

 

https://www.ato.gov.au/General/gen/tax-treatment-of-crypto-currencies-in-australia---specifically-bi...

https://www.ato.gov.au/General/Capital-gains-tax/

https://www.ato.gov.au/General/Capital-gains-tax/Working-out-your-capital-gain-or-loss/

 

Transacting with cryptocurrency

A capital gains tax (CGT) event occurs when you dispose of your cryptocurrency. A disposal can occur when you:

  • sell or gift cryptocurrency
  • trade or exchange cryptocurrency (including the disposal of one cryptocurrency for another cryptocurrency)
  • convert cryptocurrency to fiat currency (a currency established by government regulation or law ), such as Australian dollars, or
  • use cryptocurrency to obtain goods or services.

 

 

On the assumption that you're not a business , and would be treating your cryptocurrency as an investment for tax purposes.

Each disposal activates a CGT event. For each event you will have subtract the cost base from the Capital proceeds to calculate your capital gain or capital loss.

 

Working out your capital gain or loss

  • For every capital gains tax (CGT) event that happens to your assets during the year, you need to work out your capital gain or loss.
  • If you have both capital gains and capital losses, you also have to work out your net capital gain or net capital loss for the year.

 

 

Once you have worked out your net capital gain or net capital loss, then declare that figure in your tax return.

 

As always, discuss this with your professional tax accountant.

1 REPLY 1

Most helpful response

Initiate

Replies 0

Hi @hack 

 

https://www.ato.gov.au/General/gen/tax-treatment-of-crypto-currencies-in-australia---specifically-bi...

https://www.ato.gov.au/General/Capital-gains-tax/

https://www.ato.gov.au/General/Capital-gains-tax/Working-out-your-capital-gain-or-loss/

 

Transacting with cryptocurrency

A capital gains tax (CGT) event occurs when you dispose of your cryptocurrency. A disposal can occur when you:

  • sell or gift cryptocurrency
  • trade or exchange cryptocurrency (including the disposal of one cryptocurrency for another cryptocurrency)
  • convert cryptocurrency to fiat currency (a currency established by government regulation or law ), such as Australian dollars, or
  • use cryptocurrency to obtain goods or services.

 

 

On the assumption that you're not a business , and would be treating your cryptocurrency as an investment for tax purposes.

Each disposal activates a CGT event. For each event you will have subtract the cost base from the Capital proceeds to calculate your capital gain or capital loss.

 

Working out your capital gain or loss

  • For every capital gains tax (CGT) event that happens to your assets during the year, you need to work out your capital gain or loss.
  • If you have both capital gains and capital losses, you also have to work out your net capital gain or net capital loss for the year.

 

 

Once you have worked out your net capital gain or net capital loss, then declare that figure in your tax return.

 

As always, discuss this with your professional tax accountant.