As the time for lodging your 2017/2018 tax return approaches, the Australian Tax Office (ATO) have been receiving a large number of enquires from Australians regarding how capital gains tax will work with profits made from cryptocurrencies such as Bitcoin, Ethereum, Litecoin and Ripple.
“In particular, we are interested in any practical issues that may impact on taxpayers’ abilities to calculate and substantial any capital gains and losses for (cryptocurrency) capital gains tax (CGT) purposes,” the ATO mentioned.
If you would like to leave the ATO feedback or suggestions, the consultation process runs until 20 April. Consultation: Substantiating cryptocurrency taxation events.
It’s crucial to be aware of the process to make sure you are accurately showing your profits made when investing in cryptocurrencies so you don’t receive an audit request from the ATO or perhaps a hefty bill later on down the track.
Thankfully, most cryptocurrency exchanges keep a record of your transactions with such details as the buy price in USD/AUD, time, date and sell price. It’s a good idea to back these up in multiple places. Personally I have my transactions recorded in Delta as well as BTCmarkets and CoinJar.
That way when it comes to calculating out what kind of CGT you are liable for, the process is much simpler.