Crypto losses are treated the same as other capital losses like shares.

  • Crypto losses are treated the same as other capital losses like shares. 

    With crypto, capital gains tax (CGT) events occur when you sell, gift, trade, exchange or swap, convert to fiat currency, or purchase goods or services.

     

    As the ATO notes, crypto, when purchased as an investment (its most common use), is subject to CGT. Transactions such as disposal or exchange or swap are a CGT event and result in either a capital gain or capital loss. Capital losses can be applied against other capital gains but can’t be deducted against other income.

     

    If the crypto asset has been held for at least 12 months, you may be able to apply the 50 per cent CGT discount when calculating your gains.

     

    If it can be shown that crypto is not being utilised as an investment, in a profit-making scheme, or carrying on a business, and cost less than $10,000 then it may be a personal use asset and not subject to CGT.

    If crypto is used as a personal use asset, the loss cannot be considered when calculating a net capital gain to carry forward in future years.

Don’t ignore the ATO

The ATO warns that where there is high-quality crypto data, this information will be displayed via a pre-fill message in myTax and agent portals and while crypto may appear anonymous, the ATO can track money trails back to taxpayers through data from banks, financial institutions, and crypto asset exchanges.

 

The ATO says more than one-third of people transacted for the first time in 2022.

“We can match this data to an individual to assist people trading in crypto assets to properly account for these transactions and pay the right amount of tax. 

“Anyone choosing not to act may receive further scrutiny and an audit of their affairs.”

If you have a specific question about Capital Gains and Losses on the sale of your investments, please don’t hesitate to contact us.