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Initial Investment of under $10000

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Initiate

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Hey Jack1,

 

Just read your reply after I wrote mine. Seems we are having the same confusion but coming to it from different angles. Hopefully this gets addressed by Taylor and ATO. It seems very confusingly worded. Is the determing factor the cost of the crypto or the appreciated value at the time of purchase of personal good/service ? The former is clearly mentioned in the ATO documentation.

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Initiate

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Thanks TaylorY,

 

That all makes sense. So the determining factor is whether the CGT asset is a personal use asset worth less than $10,000. The part that confused me was this in your first response at the top:

 

"From the crypto-currency guidance product, you may notice that there will generally be no income tax or GST implications if you use bitcoin (or whichever crypto-currency you own) to purchase goods or services for personal use or consumption, where you are not in a business or carrying on an enterprise, and where the cost of the bitcoin is $10,000 or less."

 

The key phrase is "cost of the bitcoin is $10,000 or less". This led me to believe that the defining characteristic is that the Bitcoin must have cost less than 10000 and that the 150000 amount (the proceeds/appreciated value) to buy the car was irrelevant. So, does that mean that it's meant to be the "value" of the bitcoin at time of purchase of the car is less than 10000 ? So buying a $9000 car is fine. Any purchase below $10000 is fine as long as a good or service for personal use or consumption ? But the cost of the Bitcoin then is irrelevant for determing personal use purchase...just necessary if a CGT event?

 

Thanks again !

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Newbie

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Thank you TaylorY for your help

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Best answer

ATO Certified

Community Support

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Hi @DD,

 

Thanks for posting! The statement about personal use assets you referred to isn’t intended to apply to situations like acquiring cryptocurrency as an investment. The ‘personal use assets’ CGT exemption depends on how you obtained the bitcoin and for what purpose.

 

If you’ve been using bitcoin to increase your personal wealth (and then) use the bitcoin for a personal transaction, this does not involve personal use of assets. Check out our knowledge base article to find out more about our view on this exemption here.

 

Thanks.