Crypto capital earns one of four key areas from Australian Tax Office

The Australian Taxation Office (ATO) has identified crypto capital gains as one of the top four areas of focus in 2022. A capital gain o...



The Australian Taxation Office (ATO) has identified crypto capital gains as one of the top four areas of focus in 2022.

A capital gain or loss refers to the difference in price between when an asset was purchased and when it was sold. The percentage due to the ATO varies by income bracket and length of ownership, but generally the rate is reduced for assets held longer than 12 months.

The ATO, which has issued many warnings to crypto investors over the past few years also directly mentioned non-fungible tokens (NFTs) as an asset class that will be scrutinized for proper tax reporting.

According to According to a Monday announcement, alongside capital gains from crypto, property, and stocks, the ATO will also review record keeping, work-related expenses, and rental property income/deductions.

With the prices of most crypto assets suffering significant losses in 2022, the ATO noted that any crypto asset sold, including NFTs, must have a calculated capital gain or loss recorded with it and “will take firm action.” to deal with taxpayers. who try to tamper with their records.

ATO Deputy Commissioner Tim Loh also suggested the tax body already had a fair idea of ​​people’s investment activity, but urged everyone to keep diligent records to avoid any penaltiesindicating:

“While we receive and associate extensive information about rental income, foreign source income, and capital gains events involving stocks, crypto assets, or property, we do not pre-populate all of this information for you.”

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Loh also went on to note that the ATO has seen a significant increase in the number of local crypto investors who may not be aware of the correct reporting methods:

“Crypto is a popular type of asset and we expect to see more capital gains or losses reported on tax returns this year. Remember that you cannot offset your crypto losses with your salary and your salaries.

“Through our data collection processes, we know that many Australians are buying, selling or trading coins and digital assets, so it’s important that people understand what this means for their tax obligations,” he said. he adds.