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Re: How to declare Bitcoin?

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Newbie

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Hey there! The scene with capital gains calculation i.e. the Bitcoin tax has changed a lot since we started discussing this. Now we have got good amount of tools with varying offerings. I've given multiple tools a try like cryptotaxbot, beartax and cointracking - All of them are paid, but the question is to check what you get for your money! #bangforyourbuck 

 

cointracking is the one which is well known for everyone - been using it for portfolio. Worked well as a portfolio but for tax calculation, there are a lot of negative balances and errors.

beartax is one I felt satisfied and used it to get my tax documents. moderate number of exchanges, but those you need. Pricing is reasonable for the support and reliable results I've got

mycryptotaxbot is AU based, but charges for more than One exchange. List fo exchanges look static as nothing was happening.

 

Will evaluate more and let you guys know. Thanks for reading. 

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I'm new

Replies 0

Hello,

 

There are a lot of good tips and information in the comments regarding bitcoin taxation. It's actually a growing issue for many investors and traders as governments around the world are cracking down on this now, so it's more important than ever to report everything according to the law.

 

I can say that the most important step is to use a tax calculation platform specifically for bitcoin and cryptocurrencies. There are quite many good out there, such as Cointracker and Tokentax, but I would personally recommend checking out  CoinPanda. This is the most user-friendly software I have found, and they also support tax calculation for Australia.

 

Let me know if you have any questions or comments.

 

Thanks

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ATO Certified

Community Support

Replies 0

Hi @Numbers,

 

Thanks for your post!

 

Cryptocurrency acquired for investment purposes is not exempt from capital gains tax as it doesn’t qualify as a personal use asset.

 

Check out our new knowledge base article on personal use assets here

 

Thanks.

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Initiate

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Hi, "Any personal use asset you acquired for less than $10,000  is disregarded for CGT purposes. If you did mine a small amount of Bitcoin as part of a hobby then your cost is generally only the actual costs incurred by you".

A currency was purchased for  AUD$50 and exchanged for bitcoin, bitcoin then climbed in price to AUD$9000. Say a profit was made in the millions, how would this be taxed? It was acquired for less than 10K, so there should be no tax on to pay.

As an addition. Tax payable on cryptocurrency is far to complex.Even accountants are struggling with the interpretations laid down by the ATO. Regardless of how cryptocurrency is acquired, tax should only be payable on exchanging (sale) to a fiat currency.

Bitcoin is property and is an asset, and as such tax is not paid on it until it is disposed of.

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Devotee

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Hi @goldeagle,

 

Thanks for your post. Your post raises a few points to consider:

 

  • Cryptocurrency is not a form of currency for tax purposes - it's considered to be a capital asset, and capital gains tax (CGT) will apply in certain circumstances.
  • If you purchased cryptocurrency with the intention to invest and make money from your investment, the 'personal use asset' test does not apply. Cryptocurrency is only a personal use asset where you acquire it to make purchases with that cryptocurrency, and where you only purchase amounts less than $10,000 AUD.
  • If your cryptocurrency investment returned a profit, you'd calculate the cost base of your cryptocurrency and apply it against your profit to see if you made a capital gain. If you made a capital gain, you may be able to apply a discount to reduce the gain further. You'd add this reduced capital gain to the rest of your taxable income, and pay tax at the relevant marginal rate.

Hopefully this additional information helps to explain the tax treatment of cryptocurrencies. If you'd like more tailored information based on your circumstances, you can contact our early engagement team to discuss how we think tax law applies to your personal situation.

 

Thanks!

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I'm new

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Quick question about the 10k threshold as Personal use (thereby not required to pay CGT).  That is per person per household?  So I have 10k and my wife has also 10k CGT-free?

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Newbie

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Hi

 

We have produced a  Free Download 

 

Topics Include

  • Intoducing Necessary Crypto Concepts
  • Tax, AML/CTF & Regulatory Compliance (Australia)
  • Personal Finance Structuring (Australia)
  • Investment Strategies, Trading & Record Keeping
  • Acquiring & Storing Crypto Securely
  • And so much more!

Hopefully this can go a long way in helping the crypto community and Accountants alike!

 

Cheers

 

47.com.au

 

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Initiate

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Great read thanks.

 

It's just crazy the rulings, almost as if Australia dont want people to do better in life. 

 

I pay my fair whack in tax as an individual in the highest bracket and then as a hobby I invest some of my hard earned cash (that has been taxed) and profits on that I get smashed on tax again.  I dont mind paying tax on it or anything but neither the highest marginal rate or (because I trade a lot it's) 100% assessable under CGT is fair. 

 

If they put the discount rate of 50% from day one rather than holding 12 months then that would seem fairer.  No wonder people are looking for alternative ways of cashing out to avoid tax but legit people like me are going to suffer because of unreasonable tax rates.  How unfair on page 23 that a tradesman gets a bit of luck in his life with this crypto, makes him set up for life at $1.38m and he can finally afford a home in Sydney and then the ATO come along and say 'No, no no not that easy' and slap him with a $610k tax bill.  No wonder our best talent are moving abroad to lower tax rate places like Dubai and Singapore

 

Kind Regards

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Newbie

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I could not agree with you more having held btc and other coins since 2013.  The ATO see our risk first think it is nothing and then see profits and want some money handed over to them.

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Newbie

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Hey Zac,

 

ATO has published guidelines and it's pretty simple to read. Here's some of them in a simplified way. https://hackernoon.com/guide-for-understanding-cryptocurrency-taxes-in-australia-23f32474a229

 

Also, record keeping is one of the important things in this volatile conditions. Since you need to keep track of every AUD to BTC transactions, BTC to alts transactions and back to Fiat if you've ever sold. Keeping all this is difficult.  

 

There are few tools like the one mentioned in above article which could help you consolidate your transactions, review them and calculate your capital gains. All the best for upcoming tax season.