Posted on 13th December 2022 by Ashley Dawson
“Crypto” is the latest buzz word in society, with everyone wanting to try their luck in this new market. Whilst there has been little governance in prior years, the ATO has started to crack down on crypto currency transactions. Many of the crypto trading platforms available today now report your transactions straight to the ATO and are known as Australian cryptocurrency designated service providers.
This raises some concern for investors, who in the past, have not reported their crypto sales. The ATO is now also able to back date prior year information using their data matching software.
As a result of these latest changes, it has become important to disclose all crypto investments to your accountant before lodging your Income Tax returns, as this may raise some flags with the ATO should the sales data not match their records.
Crypto investments are, and have always been reportable, however the ATO is now making a targeted effort to ensure these sales are disclosed.
Crypto transactions are treated the same way as standard shares, and like foreign transactions they must be converted into Australian dollars at the point of the sale. The capital gain event generally occurs when you sell, transfer or gift a share, however in the case of cryptocurrency, this also includes trades, swaps, exchanges which are only some of the crypto type transactions.
The capital gain or loss is the sale amount net of the purchase costs associated and are subject to a 50% discount should the asset be held longer than 12 months, which can also be offset against any losses made.
At GeersSullivan we have relevant experience in handling cryptocurrency transactions and are starting to see more clients with these investments as time passes. Should you have any questions or need assistance with lodgement, please get in touch with one of our team members on (08) 9316 7000 or firstname.lastname@example.org.