AU Crypto Tax

Cost Base Calculation

| Element | Included in Cost Base | |---|---| | Purchase price in AUD | Yes | | Exchange fees / commission on acquisition | Yes | | Gas fees on acquisition transaction | Yes | | Exchange fees / commission on disposal | Reduces capital proceeds (or included in cost base of new asset in swap) | | Wallet transfer fees (own wallets) | Included in cost base of the asset | | Subscription to portfolio tracking tool | Included (third element -- ownership costs) |

Method for identical assets

FIFO, LIFO, or specific identification -- must be consistent and documented. ATO does not mandate a method but requires consistency.

Personal Use Asset Exemption Conditions

| Condition | All Must Be Met | |---|---| | Acquired for personal use (e.g., to purchase goods) | Yes | | Acquisition cost < $10,000 | Yes | | Used within a short time of acquisition | Yes | | NOT held as an investment | Yes | | NOT held for exchange/trading purposes | Yes |

Exemption failure conditions

If ANY acquisition cost ≥ $10,000, the personal use asset exemption does NOT apply. If crypto is kept on an exchange or held for extended periods, the ATO considers it an investment -- NOT personal use.

Trading vs Investing

| Factor | Investor (CGT) | Trader (Business Income) | |---|---|---| | Volume of transactions | Low to moderate | High frequency, systematic | | Holding period | Weeks/months/years | Minutes/hours/days | | Purpose | Long-term growth | Profit from short-term price movements | | Organisation | Casual / part-time | Business-like, significant time commitment | | Capital employed | Personal savings | Significant working capital | | Tax treatment | Capital gains (50% discount available) | Ordinary income (no CGT discount, no capital loss restrictions) | | Losses | Capital losses only | Business losses (offset all income) |

Staking Rewards

| Treatment | Detail | |---|---| | Classification | Ordinary income at market value when received | | Timing | Assessable in the income year the reward is received/controlled | | Cost base for future CGT | Market value at date of receipt becomes cost base | | Holding period for CGT discount | Starts from date of receipt |

Airdrops

| Type | Treatment | |---|---| | Airdrop with no action required | Ordinary income at market value on receipt (if established market value exists) | | Airdrop requiring action (e.g., claim transaction) | Ordinary income when claimed | | Airdrop of worthless/no-market token | $0 income; cost base = $0 | | Subsequent disposal | CGT event -- cost base is value at receipt |

DeFi Specific Events

| DeFi Action | Tax Treatment | |---|---| | Wrapping (e.g., ETH → WETH) | ATO view: likely a disposal (CGT event). Conservative: treat as disposal at market value | | Unwrapping (WETH → ETH) | Disposal of WETH, acquisition of ETH | | Providing liquidity (LP tokens) | Disposal of deposited tokens; acquisition of LP token at combined market value | | Removing liquidity | Disposal of LP token; acquisition of underlying tokens | | Yield farming rewards | Ordinary income at market value when received | | Borrowing against crypto (collateral) | Not a disposal (no change of beneficial ownership). BUT if liquidated -- CGT event | | Bridge transactions (cross-chain) | Conservative: treat as disposal + acquisition | | Token migration/hard fork | New token acquired at $0 cost base; not assessable until disposed |

Exchange Patterns -- Coinbase

| Pattern | Treatment | Notes | |---|---|---| | BUY [CRYPTO] | Acquisition | Cost base = AUD amount + fee | | SELL [CRYPTO] | Disposal (CGT event) | Proceeds = AUD received | | CONVERT [CRYPTO A] TO [CRYPTO B] | Disposal of A + acquisition of B | Market value at time of convert | | COINBASE EARN / LEARN REWARD | Ordinary income | Market value at receipt | | STAKING REWARD | Ordinary income | Market value at receipt | | SEND / RECEIVE (own wallet) | Not a CGT event | Transfer -- no gain/loss | | WITHDRAWAL TO BANK | Not a CGT event | Fiat transfer (already sold) |

Exchange Patterns -- Swyftx

| Pattern | Treatment | Notes | |---|---|---| | BUY ORDER | Acquisition | Cost base = AUD equivalent + spread/fee | | SELL ORDER | Disposal (CGT event) | Proceeds = AUD credited | | SWAP [A] FOR [B] | Disposal of A + acquisition of B | Market value at execution | | STAKING REWARD | Ordinary income | Market value at receipt | | DEPOSIT AUD | Not taxable | Fiat deposit | | WITHDRAWAL AUD | Not taxable | Fiat withdrawal |

Exchange Patterns -- CoinSpot

| Pattern | Treatment | Notes | |---|---|---| | MARKET BUY | Acquisition | Cost = AUD paid + 0.1% fee | | MARKET SELL | Disposal (CGT event) | Proceeds = AUD received (net of 0.1% fee) | | SWAP | Disposal + acquisition | Two CGT events | | AFFILIATE PAYMENT | Ordinary income | | | REFERRAL REWARD | Ordinary income | Market value at receipt | | AIRDROP | Ordinary income (if value > $0) | | | SEND TO EXTERNAL WALLET | Not a CGT event | Own-wallet transfer |

On-Chain Patterns

| Pattern | Treatment | Notes | |---|---|---| | UNISWAP / SUSHISWAP SWAP | Disposal + acquisition | Two CGT events at market value | | LP DEPOSIT (ADD LIQUIDITY) | Disposal of tokens, acquisition of LP token | | | LP WITHDRAWAL (REMOVE LIQUIDITY) | Disposal of LP token, acquisition of tokens | | | CLAIM REWARDS | Ordinary income | Market value at time of claim | | BRIDGE [TOKEN] TO [CHAIN] | Conservative: disposal + acquisition | | | MINT NFT | Acquisition | Cost base = mint price + gas | | APPROVE / REVOKE (no transfer) | Not a CGT event | Gas fee adds to cost of next related transaction |

Identify All CGT Events

List every disposal in the financial year (sells, swaps, spends, gifts, DeFi events).

Calculate Gain/Loss per Event

Capital proceeds − cost base = capital gain (or capital loss).

Apply 50% Discount (if eligible)

For each gain where asset held ≥ 12 months: net capital gain = gain × 50%.

Offset Capital Losses

Apply current and prior year capital losses against gross capital gains BEFORE applying the 50% discount. **Correct order:** Gross gains − capital losses = net gain. Then apply 50% discount to remaining gains eligible.

Add Ordinary Income

Staking rewards + airdrops + mining income reported as other income (not in CGT schedule).

Report on Tax Return

Capital gains: Item 18 (Capital gains); Ordinary crypto income: Item 24 (Other income)

Record-Keeping Requirements

| Record | Required | |---|---| | Date of acquisition | Yes | | Date of disposal | Yes | | Amount in AUD at time of transaction | Yes | | Purpose of the transaction | Yes | | Exchange/wallet records | Yes | | Counterparty details (if applicable) | Yes | | Exchange rate used (AUD conversion) | Yes | | Agent/exchange fees | Yes |

Retention period

Retention period: 5 years from the date of lodgement of the return in which the gain/loss is reported. For assets still held: records must be kept until 5 years after eventual disposal.

Hard Forks

Tokens received from a hard fork (e.g., Bitcoin Cash from Bitcoin) have a cost base of $0. No income at receipt. CGT event occurs on subsequent disposal with cost base = $0.

Lost or Stolen Crypto

A capital loss may be claimed if the crypto is demonstrably lost (e.g., lost private keys with no possibility of recovery, scam/hack with no recovery). The taxpayer must demonstrate the loss is permanent. ATO may require evidence.

Mining

| Scenario | Treatment | |---|---| | Hobby miner (small scale) | Mined coins acquired at $0 cost base; CGT on disposal | | Business miner (significant scale) | Ordinary income at market value when mined; trading stock rules may apply |

Crypto Received as Payment for Services

Assessable as ordinary income (PSI or business income) at market value in AUD at time of receipt. Cost base for future CGT = that market value.

Margin Trading / Futures

Profits and losses from crypto derivatives and margin trading are generally on revenue account (ordinary income/loss) unless clearly a one-off speculative punt.

Prohibitions

NEVER claim the personal use asset exemption for crypto held on an exchange for extended periods; NEVER apply the 50% CGT discount without verifying 12+ months holding period; NEVER apply the 50% CGT discount for companies or non-residents; NEVER offset capital losses against ordinary income (only against capital gains); NEVER apply capital losses before gross gains (apply losses first, THEN discount); NEVER ignore crypto-to-crypto swaps as non-events -- each swap is a disposal; NEVER assume DeFi events are non-taxable -- conservative approach is to treat as disposals; NEVER omit staking/airdrop income -- it is ordinary income when received; NEVER present tax calculations as definitive -- always label as estimated