If you have a capital gains asset that triggers a capital gains tax event then you have to report it in your tax return.

How to know if you have a CGT event? If you acquired a crypto asset as an investment, a CGT event is triggered when you dispose of your crypto asset by selling, exchanging, or swapping and even by gifting it to someone else. By the disposal of your cryptocurrency, you incur a capital gain or loss. Capital loss reduces the capital gain you make but you cannot deduct the capital loss from your other income.

Capital gains are also reduced by the capital discount if you hold your crypto assets for at least 12 months by 50% and you are an Australian resident for tax purposes.

You must keep records of your crypto assets and every transaction.

Keep records of the following:

• Receipts of your buying and disposing of (e.g. selling, exchanging, or gifting) your crypto assets
• Transaction’s date, purpose, and to whom it was transferred.
• The value in Australian dollars in each transaction. Use the exchange rate from a trustworthy digital currency exchange.
• Agent, accountant, and legal cost.
• Digital wallet records and keys.

Keep your records for at least 5 years. It must be in English and in writing, either electronic or paper.

There are plenty of ways to help you calculate your CGT using an online calculator. There is one from the ATO website as well as from other private online websites. You need to be able to provide the complete CGT report to your tax accountant if you engage with a tax agent to do your tax returns. It is advisable that you prepare the CGT report as early as possible before processing your income tax to avoid any delay in your filing of the tax return.

Need assistance with your tax returns? We love to hear from you. Contact us now.

Yan (Jenny) Qi CA

Founder of Progress CA Pty Ltd

Tel. no. 0403 050 779

Email: info@progressca.com.au

Website: www.progressca.com.au