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Reporting cryptocurrency activity and no cash profit produced

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Greetings,

This is a meaty enquiry.

 

Firstly, I am using Cryptotrader.tax to input and compile all data from various exchanges and wallet transfers made to account for all the relevant transactions in my tax return. My first question is; can I upload reports generated by exchange CSV files from third party vendors to substantiate my cryptocurrency activity or do I need to input the data manually?

The latter is not a practical exercise

 

Second issue I have is in two components:

Firstly, I had a small amount of cryptocurrency on the Cryptopia exchange which was hacked and has now been shutdown.

Secondly, I had a small amount of cryptocurrency on Etherdelta exchange but have lost the private access keys.

Both these issues make it impossible for me to recover the cryptocurrency off the exchange and the historic trade history.

Would this be reported as a loss or am I still liable for not providing information that is no longer accessible?

 

Finally, I have never cashed out or made a cash profit from Cryptocurrency. I have purchased cryptocurrencies but have never pulled out $AUD. What does that mean in terms of reporting my tax as there is no monetary income being harvested?

 

Thank you for your time and help on this matter.

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Hi @NoturguyBUDDY 

 

"Firstly, I am using Cryptotrader.tax to input and compile all data from various exchanges and wallet transfers made to account for all the relevant transactions in my tax return. My first question is; can I upload reports generated by exchange CSV files from third party vendors to substantiate my cryptocurrency activity or do I need to input the data manually?

The latter is not a practical exercise"

 

- Assuming it is accurate, and both yourself and tax accountant have looked over it to confirm it is, you shouldn't have any reason to have to manually input that data.

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

 

 

 

"Second issue I have is in two components:

Firstly, I had a small amount of cryptocurrency on the Cryptopia exchange which was hacked and has now been shutdown.

Secondly, I had a small amount of cryptocurrency on Etherdelta exchange but have lost the private access keys.

Both these issues make it impossible for me to recover the cryptocurrency off the exchange and the historic trade history.

Would this be reported as a loss or am I still liable for not providing information that is no longer accessible?"

 

You may be able to claim it as a capital loss. Best to read through this article section so you can ensure you can substantiate it with the applicable records, and confirm with your tax accountant.

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

 

 

 

"Finally, I have never cashed out or made a cash profit from Cryptocurrency. I have purchased cryptocurrencies but have never pulled out $AUD. What does that mean in terms of reporting my tax as there is no monetary income being harvested?"

 

-Just because you have never 'cashed out' or made a 'cash profit' doesn't necessarily mean that you may or may not have any tax implications. If you have only purchased crypto with AUD, and held it in the same form without disposing of it, than most likely you wouldn't have any current tax implications or CGT disposal event/s. But if you gifted it, traded one cryptocurrency for another, or used it for obtaining goods or services, you may have CGT disposal events. Again confirm this with your tax accountant.

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

 

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.
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Most helpful response

Initiate

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Hi @NoturguyBUDDY 

 

"Firstly, I am using Cryptotrader.tax to input and compile all data from various exchanges and wallet transfers made to account for all the relevant transactions in my tax return. My first question is; can I upload reports generated by exchange CSV files from third party vendors to substantiate my cryptocurrency activity or do I need to input the data manually?

The latter is not a practical exercise"

 

- Assuming it is accurate, and both yourself and tax accountant have looked over it to confirm it is, you shouldn't have any reason to have to manually input that data.

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

 

 

 

"Second issue I have is in two components:

Firstly, I had a small amount of cryptocurrency on the Cryptopia exchange which was hacked and has now been shutdown.

Secondly, I had a small amount of cryptocurrency on Etherdelta exchange but have lost the private access keys.

Both these issues make it impossible for me to recover the cryptocurrency off the exchange and the historic trade history.

Would this be reported as a loss or am I still liable for not providing information that is no longer accessible?"

 

You may be able to claim it as a capital loss. Best to read through this article section so you can ensure you can substantiate it with the applicable records, and confirm with your tax accountant.

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

 

 

 

"Finally, I have never cashed out or made a cash profit from Cryptocurrency. I have purchased cryptocurrencies but have never pulled out $AUD. What does that mean in terms of reporting my tax as there is no monetary income being harvested?"

 

-Just because you have never 'cashed out' or made a 'cash profit' doesn't necessarily mean that you may or may not have any tax implications. If you have only purchased crypto with AUD, and held it in the same form without disposing of it, than most likely you wouldn't have any current tax implications or CGT disposal event/s. But if you gifted it, traded one cryptocurrency for another, or used it for obtaining goods or services, you may have CGT disposal events. Again confirm this with your tax accountant.

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

 

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.