Warning: Redrawing Investment Loans
ATO Focus on Investment Loan Redraws: Ensure Accurate Tax Reporting and Navigate Interest Claims with Expert Advice.
ATO Focus on Investment Loan Redraws: Ensure Accurate Tax Reporting and Navigate Interest Claims with Expert Advice.
PPSR explained: A key tool for safeguarding your interests in personal property and gaining an edge in insolvency situations.
Understanding GST on Foods: Chobani’s AAT Case Highlights the Complexities in Taxable and GST-Free Items.
Empower your organisation with a strong workplace culture. Essential for talent retention, employee engagement, and success in the competitive market.
Navigate small business complexities with expert partners. Essential support for establishing, growing, and safeguarding your business.
Your guide to strategic business planning: crafting a path, setting precise goals, and ensuring progress for entrepreneurial triumph.
Cryptocurrency (crypto-currency or crypto) refers to any form of currency that exists online. It’s a type of digital asset in which encryption techniques are used to regulate the generation of units and transactions on a blockchain.
Everyday individuals and businesses can use cryptocurrencies (such as Bitcoin or Ethereum) to make purchases online. Cryptocurrency appeals to consumers as it operates independently, which means there’s no control from a central bank or government.
If you are involved in acquiring or disposing of cryptocurrency, you need to be aware of the tax consequences. These vary depending on the nature of your circumstances. You will need to keep records of your cryptocurrency transactions in its many forms:
If you have interacted with cryptocurrency in one or more of the above forms in the last financial year (1 July – 30 June), you’ll potentially need to declare your cryptocurrency transactions on your next Tax Return.
Capital gains with cryptocurrency work in the same way with any other asset you own.
When making a capital gain on the disposal of cryptocurrency, a portion of the gain may be taxed. In some situations, the entire gain may be taxed whereas in other situations, it can be completely disregarded.
If you’re exchanging or disposing your cryptocurrency for goods, cash or other cryptocurrencies, you will commonly need to include the capital gain or loss in your tax return. To do this, you will need to determine whether you’ve incurred a gain or a loss and also convert to Australian dollars. Certain capital gains or losses from disposing of a cryptocurrency that is a personal use asset are disregarded.
The difference between a capital gain or loss is defined by the cost base and the capital proceeds.
Cost base: the costs incurred from ownership e.g. the cost you pay initially when you buy cryptocurrency and any ongoing costs.
Capital proceeds: costs received when disposing of cryptocurrency e.g. if you sell, gift, trade, exchange, convert.
If you have experienced loss or theft of cryptocurrency you may be able to claim a capital loss. You will need to provide relevant evidence of the events and proof of ownership.
Capital gains is a complicated topic, with the CGT depending greatly on your unique tax situation. We recommend reaching out to our tax agents here at Breathe Accounting to make sure you declare your cryptocurrency assets accurately and legally.
Storing records might sound like a nuisance but trust us, when tax time rolls around you’ll save yourself immense time and stress if you’ve got your cryptocurrency records handy.
To lodge your cryptocurrency tax return you’ll need to acquire records of all transactions associated with your cryptocurrency including:
You can download a cryptocurrency tax report, which will greatly help categorise transactions and calculate realised and unrealised trading profit and/or capital gain/losses . These tax reports are accountant friendly, so we encourage you to bring in these tax reports when we work with you on lodging your tax. If this is all too hard here at Breathe we have partnered with Cryptocurrency Tax Calculator, to produce cryptocurrency tax reports you can rely on and make informed decisions with.
When it comes to lodging your tax, it’s always advised you seek professional help from your accountant.
If you have any questions to prepare for tax time or, you need expert assistance for lodgement, contact our team at Breathe Accounting today.
We’re here to help you with any- and everything tax related so you can breathe easy when EOFY hits.