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crypto investments only

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Newbie

Views 566

Replies 2

Hi Guys,

 

I am newbie to crypto and started investing when there was the start of dip on january 2018. Till now I have invested $10k and never sold any coins for DOLLAR. My current balance is $3k. SO in this case, why lodging the tax return, what provision should I be following. Since I have the loss, do I need to mention any dedections and how much deductions should I mention.

 

Any help would be appreciated.

 

Thanks heaps amigos.

1 ACCEPTED SOLUTION

Accepted Solutions
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Best answer

Taxicorn

Replies 0

Have you traded coins for coins?

 

Trades between coins are a capital gains event and you need to know $aud cost of coin A and $aud cost of coin B when traded to find out if you gained or lost for each transaction.

 

Remaining coins do not attract a loss/gain until sold or traded.

 

Any expenses related to aquiring/holding/trading or selling these coins will be added to the original cost base of the value of the coins, therefore reducing any capital gain.

 

 

 

2 REPLIES 2
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Devotee

Replies 0

I thought I knew but I don't.

If you use the CGT method... then you need to record the AUD cost/price of everything trade/time you've disposed of cryptocurrency for AUD or another cryptocurrency. This helps figure out your capital gain.. which means.. "how much your assets are worth compared to how much AUD you invested in them (not re-counting AUD you made from trading and bought back in with, only external AUD from your trading = your costs).

If your assets are worth more at the time you disposed of them overall (thus the cost base of all assets you currently hold + sold to AUD) than all the AUD you spent... then you're in profit and need to declare the capital gain for tax purposes. 

I'd like to say that. But I don't know the difference between the classification of an 'investor' vs. a 'trader'.
If a trader must be operating a business to trade, then you aren't one... and cannot use the trading stock method, which is to only declare your profit in AUD as income, and your held cryptocurrency now as trading stock (valued EOFY or other ways). So you have to then use CGT method, but you only if you're an investor. But if you do lots of trading, I don't think you classify as one?

So idk the ATO needs to clarify this. How do noobs classify, how do they account for their profit or loss, and how/where do they declare this on a tax return? I'm still unsure. And this isn't a 'each person is in a different situation' kinda thing... exchanges exist and many people use them to buy and flip between cryptocurrencies... this isn't something businesses do.. businesses run the exchange... users... trade. And if trading isn't investing... then the ATO has left no classification for normal people to be taxed on cryptocurrency.

They just need to simply clarify how a normal person using a cryptocurrency exchange should declare profit or loss... so we can move on to next year.

Highlighted

Best answer

Taxicorn

Replies 0

Have you traded coins for coins?

 

Trades between coins are a capital gains event and you need to know $aud cost of coin A and $aud cost of coin B when traded to find out if you gained or lost for each transaction.

 

Remaining coins do not attract a loss/gain until sold or traded.

 

Any expenses related to aquiring/holding/trading or selling these coins will be added to the original cost base of the value of the coins, therefore reducing any capital gain.