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Re: Tax on cryptocurrencies

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I'm new

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Replies 2

Hi

I have a query around how to account for crypto currencies in my 2017/18 income tax return. In a de facto relationship, my partner and I share things financial 50:50 (this is consistent with recent tax returns). I earned wages (putting me in a taxable bracket) in the 2017/18 year; my partner did not.

I have read the various ATO website posts, including the discussions / ATO replies on the ATO community forum. I want to do the right thing in my tax return but I am confused as to what I need to do.

Relevant crypto detail:
- between Sept and Nov 2017, we purchased cryptocurrencies;
- we have traded one currency for another on numerous occasions;
- during Dec 2017 and Jan 2018, we converted some of the crypto holdings to AUD to make three credit card payments totalling less than 20% of the initial purchases. These credit card payments were for ‘ordinary’ every day expenses (utilities, groceries, fuel, etc).

My tax return queries:
(1) Is it correct that we need to determine the net capital gain / loss up until 30th June, and use this figure in Section 18 of the tax return with respect to GCT for every crypto transaction that occurred?
(2) Assuming the net result is a gain, if half of this gain, plus any other income (bank interest etc) is less than $18,200, is it correct that my partner does not need to submit a tax return?
(3) Given ATO’s approach to cryptocurrencies, is it correct to assume that, for any financial year, the actual dollar amount that we contribute to buying cryptos, and the actual AUD amount that we ‘withdraw’ from cryptos is irrelevant? I appreciate the 50% discount for more than 12 months etc.)

Please feel free to correct any of the above assumptions and / or add your own advice. Obviously we wish to do the right thing. However, trying to get something definitive, in every day language, is difficult. Thus your guidance would be appreciated.

Thanks


1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Taxicorn

Replies 1

(1) You calculate the capital gain every time that you traded from one currency to another whether it be between digital currencies or back to $AUD.  Once you have this "overall' capital gain or loss it gets put into your tax return at section 18 divided by 2 (you and your spouse).

 

(2) True, however if there is any capital loss then she will need to lodge a tax return.

 

(3) ??? not sure what you mean....you use the amount paid/received to calculate capital gains or losses...

2 REPLIES 2

Most helpful response

Taxicorn

Replies 1

(1) You calculate the capital gain every time that you traded from one currency to another whether it be between digital currencies or back to $AUD.  Once you have this "overall' capital gain or loss it gets put into your tax return at section 18 divided by 2 (you and your spouse).

 

(2) True, however if there is any capital loss then she will need to lodge a tax return.

 

(3) ??? not sure what you mean....you use the amount paid/received to calculate capital gains or losses...

Devotee

Replies 0

the exemption for 'personal use items' only covers things you bought directly with crypto... not selling it to pay bills... as soon as you convert it to aud that is a tax event... that determines your capital gain or loss... and your purpose for trading it was to get aud... it doesn't matter to the ato what you used that aud then for... in regards to CGT on crypto.