Crypto capital gains are one of four important areas of focus for the Australian Taxation Office (ATO) in 2022.
The price difference between when an asset was purchased and when it was sold is referred to as a capital gain or loss. The amount owing to the ATO varies depending on income and length of ownership, although in general, the rate is lower for assets kept for more than a year.
The Australian Taxation Office (ATO), which has issued numerous cautions to crypto investors in recent years, has specifically mentioned nonfungible tokens (NFTs) as an asset class it will be inspecting for proper tax reporting.
According to a May 16 announcement, alongside capital gains from crypto, property, and shares,
The Australian Taxation Office will also look at record-keeping, work-related expenses, and rental property income/deductions
With most crypto assets seeing significant market drops in 2022, the Australian Taxation Office stated that every sold crypto asset, including NFTs, must have a calculated capital gain or loss recorded with it, and that it will be “taking firm action” against taxpayers who attempt to falsify their records.
Assistant commissioner Tim Loh of the ATO also stated that the taxing organization already has a good notion of people’s investing activities, but urged everyone to keep meticulous records to avoid penalties, saying:
“While we receive and match a lot of information on rental income, foreign-sourced income, and capital gains events involving shares, crypto assets, or property, we don’t pre-fill all of that information for you.”
The ATO has witnessed a considerable increase in local crypto investors who may not be aware of the proper reporting processes, according to Loh:
Crypto is a popular type of asset and we expect to see more capital gains or capital losses reported in tax returns this year. Remember you can’t offset your crypto losses against your salary and wages.”
“Through our data collection processes, we know that many Aussies are buying, selling, or exchanging digital coins and assets so it’s important people understand what this means for their tax obligations,” he added.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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