My crypto exchange sent an email saying they pay interest (4%) on Bitcoin balances. The interest is paid in Bitcoins.
Before I contemplate participating, I wanted to ask the ATO what the tax implications of this arrangement would be?
Do I have to report the 'interest' earned in Bitcoins as a dividend in my tax return?
Thank you for your help
Hi @lmorris
This is referred to often as an airdrop. This will be classed as ordinary income at the time you derive it, and the crypto you receive is a new capital asset.
This ordinary income must be reported in the return as a dividend.
You can read about staking and airdrops on our website.
Hi @lmorris
This is referred to often as an airdrop. This will be classed as ordinary income at the time you derive it, and the crypto you receive is a new capital asset.
This ordinary income must be reported in the return as a dividend.
You can read about staking and airdrops on our website.
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