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Edited version of private advice
Authorisation Number: 1051908361187
Date of advice: 14 October 2021
Ruling
Subject: Am I carrying on a business of cryptocurrency trading?
Question 1
Were you carrying on a business of crypto currency trading?
Answer
Yes.
Based on the information provided the Commissioner has agreed that you satisfied the indicators outlined in Taxation Ruling TR 97/11 for that part of the financial year ended 30 June 20XX. You had a purpose of profit as well as a prospect of profit, the activity had regularity and repetition, it was of the same kind and carried on in a business-like manner of similar activities, and its size and scale were sufficient that it would not be considered a hobby or form of recreation.
Question 2
If question one is yes, will section 35-30 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to allow the offset of losses against other assessable income?
Answer
If you satisfy the income requirement and meet one of the 4 tests you will be eligible to offset losses against other assessable income.
More information is available on the ATO website. Use QC 33774
This ruling applies for the following period:
1 July 20XX to 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You are a full-time employee who satisfies the less than $250,000 income requirement for the income year ended 30 June 20XX.
Your assessable income from the trading activity was more than $XXX for the income year ended 30 June 20XX.
You began trading cryptocurrency though a cryptocurrency exchange during the relevant period. You engaged in this trading activity with the intention to make a profit through day trading.
You invested a total of $XX,000 capital throughout this period to fund this trading activity and made a total loss of $XX,000.
You performed daily technical analysis to help you decide which cryptocurrency to buy and sell. You made approximately XXX trades over the relevant period.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1.
Income Tax Assessment Act 1997 section 35-10.
Income Tax Assessment Act 1997 section 35-30.