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Will I be taxed?

Newbie

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Hello, I have put in $2000 in total into a cryptocurrency platform in Feb 2021. I have recently taken out $900 of this (transferred it to my bank account). I have used this for day to day expenses once it was back in AUD. The remaining money is still in the app and I am planning on just leaving it there. How does this work come EOFY? Will I be taxed? Any information is helpful. 

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ATO Community Support

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Hi @Samtaylor1

 

It sounds like you're an investor in crypto.

 

This means you'll be liable for capital gains on the amount you disposed of. You have to individually identify them.

 

You need to work out how many or how much was disposed of for that $900 to be made.

 

For your capital gains, you need to know what your total proceeds were ($900), and then minus the cost base (cost to acquire that amount of crypto and other associated costs) to work out your net gain. This net gain is the amount you're taxed on.

 

You can read about cryptocurrency, elements of the cost base and working out your capital gain on our website.

3 REPLIES 3

Most helpful response

ATO Community Support

Replies 2

Hi @Samtaylor1

 

It sounds like you're an investor in crypto.

 

This means you'll be liable for capital gains on the amount you disposed of. You have to individually identify them.

 

You need to work out how many or how much was disposed of for that $900 to be made.

 

For your capital gains, you need to know what your total proceeds were ($900), and then minus the cost base (cost to acquire that amount of crypto and other associated costs) to work out your net gain. This net gain is the amount you're taxed on.

 

You can read about cryptocurrency, elements of the cost base and working out your capital gain on our website.

Newbie

Replies 1

Thank you for the response. Does this apply if the remaining $1100 I initially deposited remains in crypto, so not a loss or gain? 

Apologies if this is confusing.  

ATO Community Support

Replies 0

Hi @Samtaylor1

 

You're only taxed on the part that has a capital gain event happen.

 

Say you paid $2000 for 20 cryptocurrency. For simplicity, we'll say 20 coins. The coins are worth $100 each when you buy them. Their value goes up to $300 each, and you sell three coins (to make $900). The rest of the coins (17 x $300 = $5100) stay in crypto, don't have a capital gain event, and you don't pay tax on them. It's only once you actually dispose of them that you need to report and pay tax on the gains you make. This means you only pay tax on the gains of the $900.

 

Hope this helps! Smiley Happy