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If you acquire cryptocurrency as an investment, you may have to pay tax on any capital gain you make on disposal of the cryptocurrency.
You will make a capital gain if the capital proceeds from the disposal of the cryptocurrency are more than its cost base. Even if the market value of your cryptocurrency changes, you do not make a capital gain or loss until you dispose of it.
If you hold the cryptocurrency as an investment, you will not be entitled to the personal use asset exemption. However, if you hold your cryptocurrency as an investment for 12 months or more, you may be entitled to the CGT discount to reduce a capital gain you make when you dispose of it.
If you have a net capital loss, you can use it to reduce a capital gain you make in a later year. You can’t deduct a net capital loss from your other income.
You must keep records of each cryptocurrency transaction to work out whether you have a made a capital gain or loss from each CGT event.
Remember, we are here to help you with your Tax and BAS. Contact us on 0481 953 556 or email us at firstname.lastname@example.org to find out more.
Source: Ato.gov.au. Crypto currency as an investment. Link available here