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Crypto capital gains one of four key areas for Australian Tax Office

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Crypto capital

Crypto capital gains have been identified as one of four important areas of focus by the Australian Taxation Office (ATO) for 2022.

The difference in price between when an asset was bought and sold is referred to as a capital gain or loss. The amount owing to the ATO varies by income category and length of ownership, however, it is generally lower for items kept for more than a year.

The Australian Taxation Office (ATO), which has issued numerous warnings to crypto investors in recent years, has specifically mentioned nonfungible tokens (NFTs) as an asset type that will be reviewed for proper tax reporting.

The ATO will examine record-keeping, work-related expenses, and rental property income/deductions in addition to capital gains from crypto, property, and shares, according to a Monday release.

The ATO emphasised that any sold crypto asset, including NFTs, must have a calculated capital gain or loss recorded with it, and that taxpayers who try to falsify their records will face “strong action.”

Assistant Commissioner Tim Loh of the ATO also claimed that the taxing authority already has a good notion of people’s investing activities, but urged everyone to keep meticulous records to avoid penalties, saying:

“We don’t pre-fill all of that information for you because we get and match a lot of information on rental income, foreign-sourced income, and capital gains events involving shares, crypto capital assets, or property.”

ATO witnessed a big increase in local crypto capital investors

Loh also mentioned that the ATO had witnessed a considerable increase in local crypto capital investors who may not be aware of the proper reporting procedures:

“We expect to see more capital gains or capital losses declared in tax returns this year because cryptocurrency is a popular sort of asset. Remember that your bitcoin losses cannot be deducted from your pay or wages.”

“We know that many Australians purchase, sell, or exchange digital currency and assets through our data collection procedures,” he continued.

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