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Re: Cryptocurrency Day trading and income reporting

Newbie

Views 126

Replies 8

Hi

 

I'm day trading with crypto (not investing) and would like to be pointed in the right direction regarding reporting my income. I've registered for an ABN and will be doing my BAS quarterly. As such, I'd like to know how to calculate what my income is. Is it what my portfolio balance gains every quarter? Or is it when I pull money out of my portfolio and into my bank account?

 

Thank you

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Devotee

Replies 0

If a true trader, then sales less opening stock less purchases plus closing stock. I believe you have the option to measure closing stock at either cost or market value (but then you should be consistent from year to year)

8 REPLIES 8

Most helpful response

Devotee

Replies 0

If a true trader, then sales less opening stock less purchases plus closing stock. I believe you have the option to measure closing stock at either cost or market value (but then you should be consistent from year to year)

Devotee

Replies 6

Your income is not net gain, but gross income.

For example you bought 3 Bitcoin for 10k each, sold 1 Bitcoin for 50k, 50k is your income,

You may elect to use purchase cost 10k as your cost of sales, or revalue your closing stock (the remaining 2 Bitcoin)  at market value then work out your cost of sales. In the latter case,

Cost of sales = opening stock+ purchase-closing stock

Newbie

Replies 5

Apologies for my ignorance, does this mean in my BAS (every quarter) I'll only report my gross income, then at tax time is when I submit all my cost of sales?

Community Moderator

Replies 4

Hi @Xewp

 

Your gross income is your total assessable income. You then reduce this by your deductions. This makes your taxable income.

 

Your pay as you go instalments are paid based on your gross income. We have a PAYG instalments calculator to help work it out.

 

**edited 31 August to reflect accurate information**

Newbie

Replies 3

Hi Dan,

 

What will I be reporting in my BAS? Is it my gross income?

 

If so, at which time will I be given the opportunity to reduce this with deductions?

ATO Community Support

Replies 2

Hi @Xewp

 

You'll need to use your gross income to work it out.

 

When you lodge your tax return at the end of the year, this is when you will claim deductions, in the same way an employee would.

 

You can read about how to complete your PAYG instalments and how to vary your PAYG instalments on our website.

Newbie

Replies 1

Thank you for your reply @BlakeATO 

Another question - take this example

In the span of one day

I buy 1 btc for 50k, sell it for 45k

Buy another btc for 43k, sell it for 40k

(A very bad day of trading)

Gross income for that day is 85k?

ATO Community Support

Replies 0

Hi @Xewp

 

Correct. While your gross taxable income would be $85k in this instance, your deductions you'd claim later on will be $93k, reflecting the net loss.