ATO Community

A user thread to aid 'traders' with accounting practices and together learn 'how to' declare

This post is archived and may not be up-to-date.

Devotee

Views 2188

Replies 2

Hello, so in my past post/question I was very lost with what information is relevant, if I need to pay tax, how to declare. Lets say I have 'spent' 7.5k via coinbase on cryptocurrency, then through complex exchanging on multiple exchanges, managed to sell out cryptocurrency to aud, safely back into my account 8k.
As simple as this would be to declare the 500 aud as a profit, I have now learned that although this is a hobby for me and I do not take cryptocurrency all that seriously, trading joke coins among others, I do want to be in profit and I do want to eventually support myself enough doing this activity, that I need no support whilst being a fulltime student. Therefore, every 'trade' is a 'tax' event, relevant to accounting for my outcomes, come July.

With my actions being that of a 'trader' not 'investor', as I am only ever thinking about and researching what to trade my cryptocurrency for next, and am usually only holding onto it if isn't gaining enough for me to want to sell into other things. Then we can discuss here, ways where an less professional user/person can begin to have more profesisonal practices. With the end goal here being to learn together, how to fill in a Tax Return properly.

The idea now is as a 'trader', it might be worth having a bank account which you solely use for this purpose as you might only use a certain e-mail address so that nobody in this kind of industry full of hackers or risks, might end up knowing your true identity. There are professional precautions I have taken, which I feel are requirements of trading safely, such as using a VPN and have secure 2FA (two facot authentication). 

Here we can discuss what ways an individual can begin collecting information vital to expressing the facts before our eyes, the 'assets'/currency we hold now, how we got to holding it and accounting it back to our original purchases/trades of AUD to cryptocurrency.

The final aim of this post will be, having figured out ways to record this information and account for what we have now, what we started with and any profits or losses total, by the end of the financial year. How could we as less professional traders, go about learning how to fill in the Tax Return to reflect this information. Personally because i'm a little clueless still. 

So pease feel free to share tips and tricks, I will start with a few in the next post.



2 REPLIES 2

Devotee

Replies 0

In my past question, one user linked me to CoinTracking.info, in this post I will list some difficulties and ways to overcome them. By sharing all these difficulties in a public forum, maybe someone can point us, less professional 'traders' in the right direction or share if what we are doing is necessary and relevant to the needs of the ATO.

In CoinTracking.info the profile front page is very helpful in keeping you motivated. It shares a timeline and graphs that help bring perspective to our Year as a trader and thus make the data entry feel worth your time. The data entry will mainly be done via: https://cointracking.info/enter_coins.php

On this page, my tips are for free users. Just focus on the main exchanges that offer CSV input first. Click on that exchange, for example cryptopia or hitbtc... you will find it links you directly to the trade history page of that exchange, you're already familiar. This saves time... and it gives steps on what CSV you will want to export and how to get it.

I recommend making a folder for every exchange. Save the CSV there. The next step is simple uploading that file when prompted and then checking your profile on CoinTracking to marvel at the info.

- hours later- Custom Inputs, Deposits and Withdrawals

So now you have main exchanges supporting this form of input, the others use API access. I personally see this as a security risk, and have no API enabled on any exchange. For these what I did was export the trade history, and import it into CoinTracking using the drop down menu: Enter Coins > Bulk Imports > Custom Exchange Import... then I played with the parameters, selecting what column has what info in it.

Issues with this. Sometimes on CSV or Excel Spreadsheets, the Buy and Sell currency are in the same column, and there is then an additional colum that says "buy" next to buys and "sell" next to sells. Example: When you select the column with ETH/BTC, number 4, as buy and sell currency, it will pop up a prompt asking to know what the seperator is. It is the slash (/). Then the trick here is to set a custom parameter. Below has this option... and make it ' Reverse Buy and Sell Currency ' when 'column 5 contains 'sell' (the word) and make another one 'Reverse Buy and Sell Ammount' when 'column 5' contains 'sell' (case sensitive!). Then below let the example output update and check if this worked, and this is how you can figure it out. 

In simple terms, you're telling the custom input site to recognize column # has both the buy and sell currency in it, that the two currencies are seperate by a  /  . And to reserve which of these you're buying and selling if the buy/sell, column says 'sell' in it. Note everyting is case sensitive.

So some exchanges like Nova, are a pain and do not offer an export feature, how do you deal with this?

Enter Coins > Bulk Imports > Excel Import then download the template: (or click https://cointracking.info/import/CoinTracking_Excel_Import.xls)

This is the main form and way which CoinTracking stores information. In the left column is type. This will solve most of your issues.
You can type Deposit : then this information will fit in the Buy (currency/ammount) fields. You can type Withdrawal as a type: then the information of ammount and currency (ETH, BTC, LTC.etc) will go in the sell column. And you can paste in 'Trade' for custom trade info.

You only need to paste in the time/date, ammount bought, currency, ammount sell, currency, and fee + currency. And importantly for helping you sort all the info is remembering to type in the Exchange name, the same throughout.

If you have en error in the example import that says 'no time and date given' it is because the format of time is not compatible, so when filling in these custom Excel sheets, I made sure to highlight all time/date entries and format them in a format that works with the site.

The main issue is... if your data is wrong for this kind of manual entry, or you want to add new information and re-upload it via the template Excel (not custom), it doesn't offer you the ability to stop double entries. This is why I did not put every exchange all in one template.

My solution is to make a 'Deposit / Withdrawal' spreadsheet using this template for each exchange. Because when viewing all your entries on the overview/entercoin page: https://cointracking.info/enter_coins.php you can bulk delete all for one exchange. But as mentioned to re-upload them, if they are all in the same spreadsheet, you will have double entries for any other exchanges that were there.

So each folder for me contains a master spreadsheet of deposit/withdrawals and a spreadsheet of trades. Either the one that is compatible or a custom sheet, that I enter through 'Custom Exchange Import'.

1 folder for every exchange, 2 spreadsheets in each.

Once you have all trades, deposits and withdrawals entered for most of the exchanges you can, it becomes a task of tracking down any negative numbers in Dashboard. These are unaccounted for.

My main issue has been Ethereum. How to list EtherDelta/ForkDelta and IDEX. Using the wallet import for 'ethereum addresses' it ended up bugging out all my data and saying I have 70Ethereum... and that it is unaccounted for.

The best tool is and solution i'm using now is https://deltabalances.github.io/   (just paste your PUBLIC ethereum wallet address top page)
In delta balance you can see where all your tokens are, inside and outside of smart contracts, like EtherDelta... ForkDelta uses the same smartcontract so both are listed, IDEX and other dex. Some historical trading info... I have yet to add it, but my plan is to simply enter it in the https://cointracking.info/import/import_xls/ 

Making a spreadsheet for each DEX. I will atleast have deposits and withdrawals, and I might be able to figure out trades too, unlike the others I will include trades in the same template as deposits and withdrawals. So recap... for this spreadsheet.... the Type column is important to type the term correctly. Withdrawals (not withdraw) is deductions, so it is a sell and Deposit is an incoming so it is a buy, in this template. Obviously not a buy or sell because it will say Withdrawal and Deposit type. The other type can be a Spend, Lost, Trade .etc For Trade, the sell currency is what you got rid of and buy currency is what you got for it. You will notice straight away the exchange rate isn't necessary, because it is evident by how much you got for how much you sold.

I have done a lot of trading on EtherDelta and im apprehensive of how easy it will be to find records of that, I find smart contracts very complicated, even just looking at the address history in a blockexplorer it is very hard for me to figure out what is going on. But if I track back withdrawals of ETH or Tokens from other exchanges, when they landed back in my Ethereum wallet, I should be able to figure out what a bought/when, even if just based around deposits to exchanges of Tokens or the ETH from selling Tokens on a dex.

SAVING PROGRESS (free version)
Now on the site, before the free benefit runs out of having more than 200 trades/inputs saved. Go to https://cointracking.info/enter_coins.php The Enter Coin Overview. (Also where you can manually add single entries). Make sure all information is showing, for everything you have input (all exchanges). Have nothing typed in search and have it display as many entries on one page as possible. Then click Export. Save as CSV and Excel and maybe PDF too.

You will notice the spreadsheet you're exporting is the same as the blank one you used as a template. This means you can easily import all your stuff again, if you make a new free account or eventually get a full feature version of this platform.

Now I have no idea how to use the Tax-Report settings, but atleast you have all the accounting to backup your profit/loss and assets, which you can easily record by looking at what you have. How much you bought with AUD and sold back to AUD.

The Tax-Report settings on CoinTracking has 'short term' and 'long term', what of these settings is relevant to Australian Tax? https://cointracking.info/tax/ In short term for Australia is has 19%, 32.2%, 37% and 45% options, what is this?

Thanks.

Also if I am a trader, do I record things I have bought with Crypto or AUD for this activity? Like a VPN subscription, or even a membership to CoinTracking or some accounting advice etc ?

Although I now have a great record of all my trades to backup my outcomes, my situation. I'm no more cluey on what info I need to fill in to submit my Tax Return and where that fits into the Tax Return. Considering i'm a Fulltime Student, who does this a hobby. Is there a profit requirement to be considered a 'Trader' ?

For example how do I record my losses in terms of Fees i've paid. And if I don't have Fee information from certain exchanges, do I need to estimate it based on how many trades i've made compared to other exchanges. Or do I just not include Fee information, and if I do include it, where do I include it?

Devotee

Replies 0

Well my posts keep being deleted; however, I had a quite good tutorial here on how to use cointracking.info

Anyway -- one thing to be mindful of with Ethereum addresses, is that if you have one... random tokens will appear attached to your address, these are air dropped to all Ethereum accounts, and usually it is a marketing stunt. KFC token for example. 

These tokens aren't in your balance and i've never know them to be worth anything, ever. To actually claim them from the blockchain, I think you have to send a transaction to yourself using MyEtherWallet.

Usually the airdrop is only actually available for the first x-number of people who do the process to claim them, but they will show up on every ethereum address you have seemingly forever. You can view all these spam tokens via searching your address here: deltabalances.github.io/

They will appear yellow, and your actual tokens will appear blue (not always but most of the time). 

My biggest roadblock at the moment that is throwing my accounting out using cointracking.info, is Ethereum decentralized exchanges, like Etherdelta/IDEX... if anyone has any tips for recording trading data from either of these that would be great. Deposits and withdrawals etc.

I will search through  deltabalances.github.io/ again... actually in the left menu there is a 'single exchange history look up and it appears to have export features. I will give it a try. Looks to be working. Winning!

 

`---update

ok so there is a trading history export + deposit and withdrawal for Etherdelta/ForkDelta using https://deltabalances.github.io/history.html
you can search a range of blocks and this takes time, but the export actually has options suited to cointracking.info

there doesn't seem to be an option for iDEX unfortunately, BUT: https://idex.market/history + https://idex.market/trades 
(actually a lot simpler than I thought). 

goodluck