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Edited version of private advice
Authorisation Number: 1052045020286
Date of advice: 13 October 2022
Ruling
Subject: Cryptocurrency trading
Question 1
Are you carrying on a business of cryptocurrency trading?
Answer
Yes.
Based on the information provided, the Commissioner has agreed that you satisfied the indicators of business outlined in Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production? for the years ended 30 June 20XX to 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.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You have left full-time employment to take up cryptocurrency trading as your main venture.
You began trading cryptocurrency during the relevant period.
You engaged in this trading activity with the prime intention of making a profit, not for long-term stability.
You had significant trading activities in the 20XX-XX and 20XX-XX financial years.
You pay a monthly subscription to an advisor, who educates you and provides updates and insights into stock market trends. In addition, you utilise free online resource services to assist with analysis of market conditions.
You have an office set up in your home for the sole purpose of trading.
You have a detailed Strategy Plan.
You continually analyse market conditions, review the trading strategy and trade only the stocks which align with your strategy plans.
All activities mentioned above occur for many hours per day, depending on the market conditions and daily trade activity.
In addition to this, you can spend a number of hours per day outside of normal working hours, to analyse and trade on international markets.
You initially invested an amount of money into trading, growing your portfolio through reinvestment and growth of original outlay. You have substantial savings that are available for investment.
You do not use debt facilities or bank loans to fund trading activities.
Your trading records are kept in electronic format on your trading platform, which makes reports for tax purposes and are monitored weekly.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5
Income Tax Assessment Act 1997 section 8-1.
Income Tax Assessment Act 1997 section 35-10.
Income Tax Assessment Act 1997 section 35-30.
Income Tax Assessment Act 1997 section 70-80