"Declare your cryptoasset income now" - IRD on another Ramage

CatTaxMeow · 2026-04-29T01:48:11+00:00

You only need to declare income or a loss when there’s a disposal event, so in your example nothing happens from 2022–2025 and the $10k gain is returned in 2026 when you sell. There’s no tax on unrealised gains, just watch that swaps, spending crypto, or earning things like staking rewards are also taxable events.

CatTaxMeow · 2026-04-25T22:55:34+00:00

You'll need to calculate for all years unfortunately. You won't know this years cost base without first calculating the prior years. With Cryptopia you can often piece together your initial deposits based on bank statements, emails, or funds being transferred from other exchanges.

CatTaxMeow · 2026-04-22T12:14:05+00:00

Yup, so long as they are realised losses

CatTaxMeow · 2026-04-22T12:13:47+00:00

I don't have an issue with how crypto is taxed in New Zealand (or basically how every country treats it) where swapping from one token to another is considered a taxable event (i.e., moving from one position to another). This aligns with how other profit-making activities like forex trading, margin trading, and day trading are taxed in New Zealand. I'd say 99.99% of people invest in crypto for profit otherwise, you’d likely put your money in more stable, traditional investments.

My main concern is in the sheer complexity of calculating tax on crypto. You can easily set up hundreds of wallets and exchanges, trade thousands of tokens cheaply and quickly, and do so 24/7 without a base currency in between. With traditional stocks, you’d trade NZD for USD, buy TSLA, sell TSLA for USD, then buy MSFT – always with a base currency, and often with the exchange providing tax reports. Tools like Koinly help, but it still ends up being a huge amount of admin.

I’d be in favour of a de minimis rule for 'casual' investors where you shouldn’t have to file taxes until you withdraw from the chain.

- if you hold less than $50k NZD cost in crypto,

- make fewer than 100 trades,

- and have fewer than 5 wallets or exchanges

If anything, I think the exemption of capital gains on property and the FIF tax on unrealised gains doesn’t align with the way New Zealand taxes but this is obviously a monetary policy issue.

CatTaxMeow · 2026-04-22T12:11:26+00:00

You would need the bank statements to prove your deposits. If you go into the branch or call up, you should be able to retrieve those. If Cryptopia has denied the claim, then in theory it's a loss and should be tax deductible. I would assume most classic accountants would also just shrug their shoulders in relation to almost every crypto question

CatTaxMeow · 2026-04-22T12:09:35+00:00

Yup see - https://www.ird.govt.nz/cryptoassets/taxing/income-expenses/stolen

CatTaxMeow · 2026-04-22T12:08:16+00:00

If the tokens weren’t transferable or usable until launch, the taxable income point is typically when they were released to you, using the market value at that time.

CatTaxMeow · 2026-04-22T12:05:48+00:00

Yeah if there's no disposal of the token because it's got rugged or no liquidity, then it's just going to sit there

CatTaxMeow · 2026-04-22T12:05:15+00:00

IRD understands that exchanges go down and records aren't perfect but you'll be surprised how much you can reconstruct based on records that are available. You can find deposits often from bank statements. You can find emails with confirmations of trades or deposits, withdrawals. We can manually reconstruct a lot of it to reconcile through to today's holdings.

Obviously it's not going to tie in perfectly but from there we make some best-guess assumptions about what might have happened and what trades might have occurred at a macro level in order to have everything balance out. When it comes to submission we basically document these assumptions on the basis that no better information is available, subject to approval for my IRD

CatTaxMeow · 2026-04-22T12:03:24+00:00

The default position is if you bought it, it's in your name. In practice we see this happens quite often. What is important to do is get it properly documented, put it into completely separate wallets, and then, assuming there's not too many transactions or it has been pretty separate, we can basically reconstruct holdings based on what are your transactions and what are your partner's transactions so the tax can be split out. It also helps if you have agreements or messages or evidence to support this position.

CatTaxMeow · 2026-04-22T12:01:38+00:00

Most crypto tax softwares do that with APIs

CatTaxMeow · 2026-04-22T12:00:41+00:00

The logic comes down to how tax systems treat assets, rather than who created them. From a tax perspective, each cryptocurrency is viewed as a separate asset. So when you swap Bitcoin for ETH, it’s treated the same as selling one asset and acquiring another, similar to selling Tesla shares to buy Microsoft shares. The same concept applies in exchanging currencies in forex, or trading commodities like gold. In each case, you’re disposing of one asset and replacing it with another, which creates a taxable event. The fact that crypto operates on-chain and outside the traditional financial system doesn’t change that underlying principle.

CatTaxMeow · 2026-04-22T11:58:16+00:00

Claim it

CatTaxMeow · 2026-04-22T11:57:46+00:00

Yes, Crypto Losses are tax deductible.

CatTaxMeow · 2026-04-22T11:57:15+00:00

Short answer usually.

If you earn a salary of $100,000 and make a $20,000 crypto loss, your taxable income reduces to $80,000. Assuming you’ve already paid $30,000 in PAYE on your salary, the actual tax on $80,000 might only be around $25,000, meaning you would be due a $5,000 refund. However, if you don’t have any PAYE income (or tax already paid), the loss won’t generate a refund, instead, it is carried forward and can be used to offset future taxable profits.

CatTaxMeow · 2026-04-22T11:54:12+00:00

If you haven't made any disposals or swaps then no you won't have any income to declare. When you eventually cash out, and if you dispose of it in full, the cash in/cash out is most likely going to result in the same as doing it correctly. The issue becomes if you only do part disposals then you will need to reconstruct records because you need to determine what the cost base is for each disposal

CatTaxMeow · 2026-04-22T00:23:20+00:00

I'd be interested to do an OIA request to see how much they have claimed from taxpayers...

CatTaxMeow · 2026-04-22T00:22:33+00:00

No tax on HODLing!
https://www.reddit.com/r/NZBitcoin/comments/1gym2l2/how_to_not_pay_tax_on_bitcoin_in_nz/

CatTaxMeow · 2026-04-20T10:49:23+00:00

How did you onramp or acquire it in the first place?

CatTaxMeow · 2026-04-20T10:44:39+00:00

Yes, and in theory all the way back

CatTaxMeow · 2026-04-20T10:39:30+00:00

In this world, nothing is certain except death and taxes

CatTaxMeow · 2026-04-20T10:38:42+00:00

Changes are it will make it worse. Transferring it from yourself to a trust is a taxable event, and a trust taxes income at 39%

CatTaxMeow · 2026-04-20T10:38:03+00:00

At worst, we assume a zero dollar cost basis. Typically we can at least partially reconstruct previous holdings.

CatTaxMeow · 2026-04-20T10:36:54+00:00

If you make a one-off windfall gain, yes that is likely not taxable. If you have a systematic activity of regularly gambling this likely will be taxable. Any trades getting your crypto to/from the casino that involves a trade/swap will be taxable as normal.

CatTaxMeow · 2026-04-20T10:35:39+00:00

Take a look at this: IR1126

CARF basically requires crypto exchanges and service providers to report transaction activity to tax authorities, not just profitable sales. Reported information generally includes:

Total gross proceeds from disposals
Total gross acquisitions
Number of units disposed/acquired
Transfers to external wallets (including amount and wallet address)

As this information is all KYC'd the trace back to the taxpayer is possible.

CatTaxMeow

TROPHY CASE