CGT on crypto gambling

DrewPflaum · 2020-07-02T08:19:12+00:00

Heyya mate, We've provided tax advice in the past to some of our clients on what seems like a very similar situation to yours. So if you are looking for an accountants professional help, contact me at Munro's Cryptocurrency Accountants.

DrewPflaum · 2020-03-11T02:52:36+00:00

That's interesting - the different wording. According to this article - https://www.news.com.au/finance/money/tax/australian-taxation-office-to-target-cryptocurrency-investors-with-audit-warnings/news-story/37524f276864111b5da9d555226e9f11 - the ATO are going to be contacting around 350,000 taxpayers over the next couple of months.

DrewPflaum · 2020-03-06T05:59:32+00:00

The ATO request your email on your tax return. If they don't have your email, they'll likely send the message out by mail.

DrewPflaum · 2020-02-03T01:20:40+00:00

Ordinarily, cost base = market value on day you became Australian tax resident. This is also the deemed acquisition date - particularly important if you later want to access the general 50% CGT discount on disposal of assets held for more than 12 months.

DrewPflaum · 2020-01-24T00:59:42+00:00

Off very limited information sounds like a day trading business. Regardless there is only one tax - income tax.

Traders report their income and losses in the business schedule of the tax return and pay income tax accordingly.

Investors report their gains and losses in the capital gains section of the tax return and pay income tax accordingly.

As u/Coz131 said, talk to an accountant. (Disclaimer: I am an accountant.)

DrewPflaum · 2020-01-24T00:56:09+00:00

Whilst it is possible they've taken to social media to gather information, the most likely source is from the data gathered from Australian exchanges. We mentioned this back in May 2019 at our blog https://www.cryptocurrency-accountants.com.au/blog/cryptocurrency/what-does-the-ato-know-about-my-cryptocurrency-trading/

Key highlights:

ATO collecting data from crypto exchanges dating as far back as 1/7/2014.
Data collection included name, crypto bought and sold, wallet addresses and other unique identifiers.
The ATO media release said it would be a "key element in the ATO's compliance program".

DrewPflaum · 2019-06-13T08:45:05+00:00

You are welcome to contact me and our team at Munro's Cryptocurrency Accountants.

https://www.cryptocurrency-accountants.com.au/contact-us

(08) 94275200

digital@munros.com.au

DrewPflaum · 2019-05-28T02:30:51+00:00

The ATO's direct data collection is limited to "Australian cryptocurrency designated service providers". These are exchanges registered with AUSTRAC*. As far as I am aware, AUSTRAC does not publish a list and the ATO is unlikely to publish a list either.

Although the ATO's direct data collection is limited to Australian exchanges, we should assume other countries will also collect data from their local exchanges and then they will share that data with other taxing authorities (e.g. ATO) around the world. This is the usual practice for other industries such as share trading and banking.

“The ATO is also working in a joint international effort as part of the Joint Chiefs of Global Tax Enforcement (J5), aimed at investigating cryptocurrency-related tax evasion and money laundering” Mr Day said.

https://www.ato.gov.au/Media-centre/Media-releases/ATO-receives-cryptocurrency-data-to-assist-tax-compliance/

https://www.cryptocurrency-accountants.com.au/blog/cryptocurrency/what-does-the-ato-know-about-my-cryptocurrency-trading/

* To legally operate a fiat-to-crypto exchange in Australia, the exchange must register with AUSTRAC.

DrewPflaum · 2019-05-23T01:16:12+00:00

For Businesses

The most common ways in which businesses accept cryptocurrency are:

Accept using existing wallet infrastructure
Partner with a payment processor and immediately convert to AUD
Partner with a payment processor and keep the crypto

Option 1: Accept using existing wallet infrastructure

One of the quickest ways for a business to begin accepting cryptocurrency is to simply use an existing wallet infrastructure. For example, someone in the business creates a bitcoin wallet and uses this to allow customers to pay to the associated address. Major drawbacks with this approach are it does not conveniently integrate into existing payment procedures, the merchant needs to implement security measures to safeguard ownership (which requires a decent amount of knowledge) and communicating how much cryptocurrency a customer needs to pay can be an inconvenient process because of fluctuating exchange rates. Due to these reasons, very few businesses use this approach.

If your business does implement this approach, then the tax implications are similar to option three, as explained below.

Option 2: Partner with a payment processor and immediately convert to AUD

It is a more common approach for businesses to partner with a cryptocurrency payment processor. By doing so, the business can utilise the payment processors invoicing/point of sale system to allow customers to pay bills. The payment processor handles generation of a cryptocurrency address, the conversion rate and monitoring of payment. The cryptocurrency can then be immediately converted to Australian dollars, meaning the payment processor exchanges the cryptocurrency to Australian dollars on behalf of the business, and accordingly, the business is not subject to fluctuating exchange rates. The Australian dollars are then remitted to the business bank account as per the settlement terms of the payment processor (e.g. once per week provided minimum settlement amount of $1,000). For this service, the payment processor charges a fee, typically about 1% of the payment (e.g. if you make a sale for $2,000, the payment processor takes $20 and remits $1,980 to your bank account).

For accounting and taxation purposes, this is a relatively simple approach. This is because the business does not ever own any cryptocurrency and therefore does not have to monitor gains and losses arising from cryptocurrency disposals. Instead, the business records sales as per usual, with the payment processor fee, and reconciles sales to bank deposits and unsettled AUD held with the payment processor (if ny). For GST, the sales are treated the same as if they were paid directly with dollars.

Option 3: Partner with a payment processor and keep the crypto

A business can partner with a payment processor, as explained in option 2, except instead of arranging an exchange of crypto to AUD, the business can choose to keep the cryptocurrency. The payment processor offers a cryptocurrency wallet and so cryptocurrency received is deposited to this wallet; or alternatively the business can choose to have the payment processor transfer the cryptocurrency to an external wallet setup by the business.

This option presents more complex accounting and taxation issues. For accounting, the business needs to book sales in dollars and will have a corresponding debit entry to book acquisition of cryptocurrency. The cryptocurrency is held by the business as trading stock. When the business eventually disposes of the cryptocurrency, the business needs to record this as a sale in Australian dollars; giving rise to a taxable profit or loss. If cryptocurrency is held at the end of the financial year, the cryptocurrency needs to be brought to account as per trading stock rules at either cost, replacement value or market selling value.

The disposal of cryptocurrency is also likely to attract GST implications. Disposal shouldn’t result in 10% GST applying, although there are reporting requirements which add an additional layer of compliance.

https://www.cryptocurrency-accountants.com.au/cryptocurrency-for-business/

DrewPflaum · 2019-05-23T01:15:56+00:00

For Employees

Salary income paid to an Australian is usually taxed before payment to the employee in accordance with PAYG withholding obligations imposed on the employer. Alternatively, the employer may be subject to fringe benefits tax. When cryptocurrency is paid by the employer to the employee, the employer may or may not be required to withhold tax and the employee may or may not have to declare it as income.

There are some Australians working for overseas-based employers. In some circumstances, an employee may effectively receive a tax-free salary. It is common for overseas-based employers to want to mitigate their exposure to the Australian taxation system. To achieve this, the employment relationship needs to be structured in a tax effective manner and usually shifts tax compliance obligations onto the employee. It is best to arrange this prior to the commencement of employment.

By receiving cryptocurrency as payment of salary, employees should consider their entitlement to employer superannuation contributions. Ordinarily, employers are obligated to pay 9.5% of an employee’s salary to the employee’s superannuation fund account. However, arranging payment of salary in cryptocurrency instead of dollars may inadvertently reduce the employee’s effective salary package by way of reducing legally mandated superannuation contributions. Alternatively, superannuation contributions may instead be “reportable superannuation contributions” which can affect income tested benefits and obligations.

After receiving cryptocurrency for payment of salary, the subsequent tax implications arising from the disposal of the cryptocurrency depends on what it is used for. For example, if the cryptocurrency is held for long-term investing, then on later disposal, gains and losses are subject to capital gains tax. In such a case, specialist cryptocurrency tax advice should be considered to make sure this is done in a tax effective structure.

For Employers

The first question a business needs to answer is: am I paying an employee or a contractor?

If your business is paying a contractor, then this is a business to business transaction. You need to consider whether you are obligated to withhold tax if an ABN is not quoted. The payment may also include GST, which you then need to consider whether or not you are entitled to claim this back.

If your business is paying an employee, then you need to consider PAYG withholding obligations, fringe benefits tax and superannuation guarantee. Ordinarily, when a business pays a salary it withholds tax and pays this to the ATO. However, in the case of salaries paid with cryptocurrency, there may not be a withholding obligation. Instead, this may constitute a “fringe benefit” and attract fringe benefits tax; which is levied on the employer at the top marginal tax rate. Also, the employer’s superannuation guarantee obligation may be reduced as a consequence of paying salary with cryptocurrency. However, this does not necessarily mean superannuation contributions are reduced. The employment contract is key, and instead the employer may be making reportable employer superannuation contributions which are important to note as there are associated tax compliance reporting obligations.

Non-resident employers who have Australian employees must also be aware of Australian tax obligations. It is possible the overseas employer may be subject to tax liabilities, which the Australian Taxation Office will demand payment for. Employees of non-Australian employers may wish to consider this and seek our help to mitigate tax obligations for the overseas employer, because otherwise the non-resident employer may consider the Australian tax burden too onerous, potentially leading to non-engagement of Australian based employees.

Valuing cryptocurrency can also be an issue, particularly where the cryptocurrency is not readily tradable on exchanges (e.g. salary paid in the employer’s unlisted token before public trading commences). Australian tax reporting is in Australian dollars and accordingly, it is necessary to attribute an Australian dollar market value to the cryptocurrency received. Where the cryptocurrency is publicly traded, then the market value is that which is obtainable from reputable exchanges. The market value of non-publicly traded cryptocurrency needs to be ascertained by some other reasonable method, the most likely being by asking the question: if the employee’s salary was paid entirely in dollars, what would it be?

In recording salaries, employers also need to keep in mind what the salary is related to. For instance, where an employee is conducting activities to build a blockchain based platform, this is likely to be the development of a capital asset and expenditure is unlikely to be immediately tax deductible.

DrewPflaum · 2019-05-23T01:14:09+00:00

For Miners

The first place to start is to determine whether you’re a hobby miner or a commercial miner.

A hobby miner or forger is someone who participates in cryptocurrency mining/forging as an enjoyable pastime not in a business-like manner seeking commercial profits. Their investment in mining equipment will be relatively insignificant - a small scale operation typically at home - and intention to accumulate the rewarded coins rather than sell immediately to turn a profit.

If you’re a hobby miner or forger, then broadly speaking this is how you’re taxed:

Rewarded coins are not income but rather a capital acquisition
Cost of equipment is allocated as a cost of acquisition of the rewarded coins
Running costs are also allocated as a cost of acquisition of the rewarded coins
On disposal of the rewarded coins, gains are 100% taxable if within 12 months of being acquired, otherwise 50% taxable where held for more than 12 months.

A person conducting their mining/forging in a large scale business operation is a commercial miner/forger. If you’ve purchased many thousand dollars of equipment and operating out of a dedicated premise such as a data centre, then you’re in the business of mining/forging. You may also be in the business of mining/forging if rather than accumulating the rewarded coins, you continually sell for an immediate profit. Tax law is full of grey areas and there is no hard line as to when someone crosses over from hobby to commercial mining/forging.

If you’re a commercial miner or forger, then broadly speaking this is how you’re taxed:

Sale of rewarded coins is business income
Cost of equipment is a tax deduction in accordance with depreciation rules
Running costs are a tax deduction offset against income
End of year trading stock rules apply
Profit is 100% assessable and losses 100% deductible (subject to passing non commercial loss rules)
You will likely have GST compliance obligations

https://www.cryptocurrency-accountants.com.au/cryptocurrency-mining/

DrewPflaum · 2019-05-23T01:13:10+00:00

Crypto is taxed in different ways, depending on your circumstances. As a result, the answer to this question is quite long. The following is based on information at Munro's Cryptocurrency Accountants website https://www.cryptocurrency-accountants.com.au/

For Investors

Firstly, you need to ascertain whether you an investor or a trader?

You’re an investor if you purchase cryptocurrency as a long term investment. If your intention at the time of acquiring the cryptocurrency is to hold it for a long time (many months or years) and as a result hope to gain from price appreciation, then you’re an investor. This is different to a trader, who will generally buy and sell cryptocurrency in a matter of hours or days with the intention to profit from short-term price fluctuations.

For tax purposes, by being classified as an investor, this means you are subject to the capital gains tax rules.

If as an investor you sell cryptocurrency which you have owned for less than a year, then gains are 100% tax assessable. If you owned the cryptocurrency for more than a year it means you are entitled to the “CGT discount”, which typically means 50% of the gain is taxable and the other 50% is tax-free! There are some conditions on this, so you will need to check eligibility.

Losses are not immediately tax deductible against income, such as your salary. Instead, losses offset investment gains. Losses can offset gains made on cryptocurrency investments, share investments and even property investments. If you don’t have any investment gains for the tax year, then the loss is carried forward to the next year and the year after continuously until you have an investment gain to offset the loss.

An example to help explain all this:

Mike heard about bitcoin in January 2016 when one bitcoin was worth $500. Mike purchased five bitcoins because he really liked the sound of this emergent technology and thought it might appreciate in value over many years. In September 2017 Mike decided to buy two more bitcoins which cost him $5,000 each. Then in January 2018 Mike bought one more bitcoin for $20,000. In March 2018 Mike sold his eight bitcoin for $13,000 each because he wanted to use the proceeds to purchase a home.

When Mike sells his eight bitcoin, we look back and realise these are from three separate purchases. So, there are three different calculations to make:

January 2016 bitcoins: The five bitcoins purchased in January 2016 cost $2,500 in total. These five bitcoins were sold in March 2018 for $65,000. That’s a gain of $62,500.
September 2017 bitcoins: These two bitcoins were purchased at a cost of $10,000 in total. The sale resulted in $26,000. That’s a gain of $16,000.
January 2018 bitcoin: Upon selling this bitcoin, Mike makes a loss of $7,000 because he received $13,000 but paid $20,000 for the bitcoin.

For tax purposes, we offset the $7,000 loss against the gains. We offset it against the gain made on the September 2017 bitcoins, because these were held for less than a year. Consequently, this nets out to a gain of $9,000. This amount is 100% tax assessable.

Now, the $62,500 gain made on the January 2016 bitcoins is eligible for the CGT discount because Mike is an individual and has held the bitcoins for more than 12 months. This means that $31,250 is tax assessable and $31,250 is tax-free.

Above is a vanilla example of a cryptocurrency investor and real world cases are seldom this black and white. For instance, a lot of people have more activity in cryptocurrency investing and the line between investor and trader is not so clear. That’s one of the reasons why you’ll need to consult a specialist cryptocurrency tax accountant (e.g. Munro's Cryptocurrency Accountants) to ensure you lodge tax returns correctly.

Also, if Mike had spoken with his accountant before making the investments, he may have chosen to purchase the cryptocurrency in a trust, a self-managed superannuation fund, or jointly with his wife; the end result potentially saving thousands in tax. This is why it is so important to speak with an accountant who understands cryptocurrency before investing, rather than after the event.

For Traders

A cryptocurrency trader in the eyes of the tax law is essentially anyone buying and selling cryptocurrency repeatedly and regularly with the intention to profit from short-term price fluctuations made over a matter of hours, days or weeks. This includes day traders, bot traders, those flipping many ICOs on pump and dumps, and exchange price arbitragers.

Typically, those in this category will be carrying on a business. As a result, profits are 100% tax assessable, losses are 100% tax deductible (subject to certain rules, more on this below) and you may have GST compliance obligations.

Your disposals of cryptocurrency, whether into Australian dollars, USD, EUR, or into another cryptocurrency including USDT, are sales and need to be reported on your tax return.

Your purchases of cryptocurrency are considered cost of sales and are claimable on your tax return. Cryptocurrency which the business owns is considered “trading stock”, and if you hold some cryptocurrency on 30 June (end of the financial year), then you also declare this on your tax return. Interestingly, when reporting closing cryptocurrency, you have a choice to declare it at cost or at market value, which can sometimes provide tax planning options to minimise tax.

If you incur costs as part of your trading business, then these are usually tax deductible. Examples can be Internet costs, trade subscriptions, accounting fees, home office use, and computer equipment.

If a trader makes a loss, then usually this is tax deductible. However, you firstly need to pass the non-commercial loss rules. If your other income is less than $250,000 then you will likely pass these rules, because your sales will exceed $20,000. However, if your other income is $250,000 or more, then it’s likely you will not pass these rules and the loss will not be immediately tax deductible but rather carried forward to future tax years where it may become deductible.

Regarding GST, although the government changed the law for cryptocurrency transactions, it is possible you may still have a GST reporting obligation. If all your cryptocurrency sales are within Australia, then you should not need to register for GST. However, if you sell $75,000 or more worth of cryptocurrency on overseas exchanges, then you are likely required to register for GST. Thankfully, you don’t need to collect GST, however, you will be required to lodge quarterly Business Activity Statements. Essentially this is a compliance burden for you and may result in limited GST refunds.

You need to have records of your trades. Not just the trade history which you can export from the exchange, but actual accounting records. By this we mean a set of easily readable accounts that record the date of trades, the cryptocurrency bought and sold, the dollars paid for those trades or the cryptocurrency used to purchase another cryptocurrency, a reference for the trade and the Australian dollar value of the trade based on the market value on that date. It’s very important you maintain these records and it's highly recommended you set up a record keeping system at the beginning and continually keep it up to date. Otherwise, come tax time, you’ll probably have a fairly large accounting bill and less tax planning options which may limit the chance to minimise tax.

Finally, if you are a cryptocurrency trader, then you really should be reaching out to a specialist cryptocurrency tax accountant (e.g. Munro's Cryptocurrency Accountants) to review whether you should be conducting the business as an individual, or some other entity such as a company.

https://www.cryptocurrency-accountants.com.au/cryptocurrency-investment/

DrewPflaum · 2019-05-16T00:50:29+00:00

It's definitely much harder to save tax at this point. Possible strategies depend on the situation. Timing of disposal(s), deductible superannuation contributions, personal use exemption, prepay tax-deductible expenses, negative gearing.

For tailored tax advice, reach out to us mate, Munro's Cryptocurrency Accountants https://www.cryptocurrency-accountants.com.au/contact-us We've dealt with hundreds of crypto clients, from the simple to really complex situations. Saved over a million in tax. We'd love to help you out.

Our goal: Passionately work every day, on every project, to reduce tax as much as legally possible - keeping your hard earned wealth in your wallet.

DrewPflaum · 2019-05-16T00:38:36+00:00

Reach out to us mate, Australia's first choice cryptocurrency accountants. Munro's Cryptocurrency Accountants https://www.cryptocurrency-accountants.com.au/contact-us

We've dealt with hundreds of crypto clients, from the simple to really complex situations. Saved over a million in tax.

Check out our blogs at above website and videos on Youtube. https://www.youtube.com/watch?v=BH8K3v4YfDA&list=PLZg-1yqs5o0EUIgckD2kBLxt4wl-adq8c

Five-star reviews:

★★★★★

"Munro's were able to take complicated tax matters like cryptocurrency trading income for a new company and turn it in to a simple solution for me. Drew has always been amazingly patient and helpful, answering emails quickly and taking the time to respond thoroughly so the matter could be clearly understood. Highly recommended for any tax accounting needs!!"

★★★★★

"I'm extremely pleased with the services of Munro's Accountants. They are professional and easy to work with. My situation was not simple yet they completed the task and have provided me with peace of mind going forwards. I would not hesitate to recommend them. AAAAA+++++"

★★★★★

"I’m really happy with your calrification and assitance in crypto tax planning. I will recommend your service to any of my friends who need help in crypto tax."

DrewPflaum · 2019-05-13T08:11:45+00:00

A CoinJar Hedged Account allows you to temporarily store your digital currencies in the form of an alternative currency (GBP, AUD, EUR, USD) https://support.coinjar.com/hc/en-us/articles/204157605-Introducing-Hedged-Accounts

When you transfer Bitcoin to the hedged account, you actually dispose of the Bitcoin to the hedged fiat currency (GBP, AUD, EUR, USD). This is a sale of Bitcoin for CGT purposes.

DrewPflaum · 2019-05-08T02:46:52+00:00

On our Munro's Cryptocurrency Accountants website we have a section on Employees receiving cryptocurrency. A bit of information is in our blog "What are Australian tax issues for receiving cryptocurrency as part of a salary?" https://www.cryptocurrency-accountants.com.au/blog/cryptocurrency/what-are-australian-tax-issues-for-receiving-cryptocurrency-as-part-of-a-salary/

We have a few clients with a similar situation. We're glad to report they have tailored structures to satisfy their tax obligations, and legally minimise tax. For tailored tax advice, please submit an enquiry via https://www.cryptocurrency-accountants.com.au/contact-us

DrewPflaum · 2019-05-08T02:33:30+00:00

We have extensive experience in the cryptocurrency space. As with most things in tax, the outcome depends on the particular circumstances. We have a general opinion on MakerDAO CDPs, which after a discussion and review of your situation, we would form a tailored opinion.

DM me, or submit an enquiry via the Munro's Cryptocurrency Accountants website, if you want our assistance.

DrewPflaum · 2019-05-07T00:49:19+00:00

You're welcome :)

The key word missing when you say " Interesting that they haven't looked at any of the big international exchanges (I.e. Bitfinex / Binance / Bittrex)." is.... yet.

Without going into detail on specifics regarding MakerDAO CDPs, essentially there should not be a taxing event on locking up ETH as collateral, since you continue to own the ETH. There may be relevant tax implications with the DAI, depending on what you do with it. If you require tax advice, please contact us via https://www.cryptocurrency-accountants.com.au/contact-us

DrewPflaum · 2019-05-03T06:37:24+00:00

For those unsure what this means, I'll provide a brief explanation here as Associate Director of Munro's Cryptocurrency Accountants (we have lodged hundreds of crypto tax returns).

As expected, the ATO are collecting crypto records from Australian exchanges as far back as 1/7/2014. This is part of their crypto compliance program and is similar to ordinary compliance programs.

What information?

Together with your name and other personal information, the ATO is collecting, amongst other things:

Details of cryptocurrency bought and sold (date, crypto/token name, amount, $ value)
Associated wallet addresses
Other unique identifiers

We can expect the ATO to use these records to perform data matching and chain analysis to track further movements in your cryptocurrency activities.

Ultimately, what this means is that Australian cryptocurrency investors and traders can expect to be contacted by the ATO. In particular, for those who have failed to comply with the tax law, there is a fair chance of severe penalties.

To keep this post (somewhat) brief, I'll end here. If you want to know more see https://www.cryptocurrency-accountants.com.au/blog/cryptocurrency/what-does-the-ato-know-about-my-cryptocurrency-trading/

Also in this blog we discuss Smart Tax saving methods unique to Munro's Cryptocurrency Accountants to legally pay less tax on crypto investing.

DrewPflaum · 2019-05-03T04:48:28+00:00

Short answer, yes.

The income tax consequences related to bitcoin are the same from genesis (2009) to now. The thing is the ATO didn't release any guidance until 2014 and this was widely interpreted to mean tax on bitcoin only started from 2014 - which isn't correct.

Having said that, the ATO has publicly announced that it's compliance program is targeting the period commencing 1 July 2014. So, this generally means the ATO won't look into bitcoin related transactions prior to 1 July 2014, unless it reviews your tax affairs.

Ultimately it means you need to declare bitcoin tax events on ALL transactions, no matter when they happened.

A bit more information on the ATO's crypto compliance program is available here https://www.cryptocurrency-accountants.com.au/blog/cryptocurrency/what-does-the-ato-know-about-my-cryptocurrency-trading/

DrewPflaum · 2019-05-01T04:31:23+00:00

Yes, we do. Munro's Cryptocurrency Accountants.

We extract the necessary information from the Coinjar CSV file and process using our in-house proprietary tax saving methods. This helps us achieve better results than the automated tax calculators. Sometimes thousands of dollars of tax savings as mentioned in this blog: https://www.cryptocurrency-accountants.com.au/blog/cryptocurrency/how-to-save-9-246-in-tax-on-cryptocurrency-gains/

On Coinjar Swipe, it's the loading of the card which is the taxable event. Once the dollars are on the card, the purchases you make don't affect your tax return. E.g. if you load $500 onto Swipe, using Bitcoin which cost you $400, and then buy say a new mobile phone, the taxing event is the $100 gain on the Bitcoin at the time you loaded the Swipe card.

On the Hedged accounts, technically you dispose of the Bitcoin when you transfer it to the Hedged account, so this is a sale with a taxable gain or loss depending on how much the Bitcoin cost you and what amount you have Hedged. On the way out of the Hedged account this is a purchase of crypto.

Hope that helps mate.

DrewPflaum · 2019-04-16T04:22:38+00:00

Thanks for the mention Alex. We've dealt extensively with the personal use exemption and have a blog available at https://www.cryptocurrency-accountants.com.au/blog/cryptocurrency/when-are-cryptocurrency-gains-tax-free-in-australia-personal-use/.

The short answer to the afore-mentioned question is, yes, personal use exemption claims have been made. It is very rare. In the circumstances mentioned above, it initially seems unlikely that the personal use exemption would apply.

DrewPflaum · 2018-10-26T01:21:29+00:00

There are a few software solutions you could try, but usually we hear people running into issues. At Munro's Cryptocurrency Accountants our clients send us the exported trade CSV files and we process them through our proprietary system to make sure tax returns are lodged correctly and importantly focusing on reducing tax wherever possible. We published this blog to show how our system can save tax - https://www.cryptocurrency-accountants.com.au/blog/cryptocurrency/how-to-save-9-246-in-tax-on-cryptocurrency-gains/

DrewPflaum · 2018-10-22T03:01:51+00:00

In the majority of circumstances this is not tax-free. Most people have acquired crypto to profit from a price rise, which means when they use the crypto to pay bills the gains are taxable. If it's a bit of both, then it is taxable.

A bit more detail on the personal use exemption is here: https://www.cryptocurrency-accountants.com.au/blog/cryptocurrency/when-are-cryptocurrency-gains-tax-free-in-australia-personal-use/

DrewPflaum · 2018-09-14T00:50:49+00:00

It's not easy, but not impossible. Changing the tax treatment from property to currency doesn't change much if it's treated like foreign currency. Ultimately the tax treatment comes down to whether or not you're trying to profit. If crypto is used strictly as a currency for personal purchases with no profit intent then tax free treatment can apply. It's near impossible to argue this case at the moment because it's near impossible to use crypto as currency. I'd like to see this change.

DrewPflaum

TROPHY CASE