Investor Tax Obligations
Investing in cryptocurrency?
We can take the stress away for you so that you understand and can prepare for how cryptocurrency investments are taxed, so that you can avoid possible penalties, issues or audits in the future.
SELL OR SWAP
Whether you sell cryptocurrency for Australian dollars or exchange
one form of cryptocurrency for another, the tax treatment is the same:
You will always be liable for CGT and will need to record any gain on
your tax return.
‘PERSONAL USE’ EXEMPTION
Some taxpayers mistakenly think they can buy up to $10,000 of cryptocurrency and avoid CGT by taking advantage of the ‘personal use’ exemption.
This exemption only applies where the cost of the cryptocurrency does not exceed $10,000 and you can demonstrate that the cryptocurrency was to fund genuine personal consumption.
If you buy and sell cryptocurrency on a regular basis with the goal of making a profit, then the profit on disposal of the cryptocurrency will not be subject to CGT. Instead, it will be assessable income as you will be regarded as a ‘trader’ rather than an ‘investor’.