In an update on the ATO website following its earlier guidance in July, the tax office has advised that if you carry on a business that involves transacting with cryptocurrency, then trading stock rules apply, rather than capital gains tax (CGT) rules.
Further, following 799 pieces of individual feedback and submissions, the ATO has provided additional guidance on the practical issues of exchanging one cryptocurrency for another and the record-keeping requirements.
Some of the issues raised included difficulties in keeping records due to high-volume trades or accessing data required for proper record keeping.
“As part of our research, we discovered low-cost software solutions that would be able to both record each cryptocurrency transaction (including cryptocurrency to cryptocurrency transactions) and convert the value of the proceeds into Australian dollars,” said the ATO in response.
“The software can take information directly from the exchange or a digital wallet and do the calculations, which helps alleviate the issues with recording trades and accessing data.”
According to the tax office, where you exchange one cryptocurrency for another cryptocurrency, you dispose of one CGT asset and acquire another CGT asset.
Taxpayers must compare the CGT cost base of the cryptocurrency item disposed of with the market value of the new cryptocurrency item obtained for all exchange transactions.
The ATO will continue to monitor community feedback and provide updates on new and emerging cryptocurrency risks.
The not-to-be-missed Accountants Daily Strategy Day will travel through Melbourne and Sydney in August to equip accounting professionals with the latest industry updates and tips for modern practice management as well as the latest cutting-edge technology, processes, strategies and trends shaping the future of accounting. Visit the website for more information: www.accountantsdaily.com.au/strategy-day
TRENDING
