Tax and crypto asset investments

You can visit the ATO Publication Ordering Service to download a copy of the Tax and crypto asset investmentsExternal Link fact sheet.

Tax and crypto assets

How you interact with crypto assets determines if you need to report income, a capital gain or loss, and if you can claim a deduction.

If you exchange crypto assets for goods, cash, or other crypto assets then it's likely a disposal for the purposes of capital gains tax (CGT) and you may need to include a capital gain or loss in your tax return.

Make tax time easier by remembering these tips:

• Keep good records
• Report crypto in your tax return
• Report capital gains and losses
• Personal use assets
• Calculate CGT correctly

It’s important to keep good records of each crypto asset and every transaction. You can find out more about the records you need to keep and how long to keep them at Keeping crypto records.

Table: Records you need to keep when you buy, hold or sell an investment

Buying (acquiring)	Owning (holding)	Selling (disposing)
receipts of transactions, or documents that display the crypto asset the purchase price in Australian dollars the date and time of the transaction what the transaction was for commission or brokerage fees on the purchase agent, accountant, and legal costs exchange records	software costs related to managing your tax affairs digital wallet records and keys documents showing the date and quantity of crypto assets received via staking or airdrop	receipts of sale or transfer documents that display –the crypto asset –the sale or transfer price in Australian dollars –the date and time of the transaction –what the transaction was for commission or brokerage fees on the sale or transfer exchange records calculation of capital gain or loss

Report crypto in your tax return

What you need to do:

• convert the value of crypto assets to Australian dollars
• include the Australian dollar value of established tokens received by way of airdrops and tokens received as staking rewards as income at 'Other income'
• include any capital gains or capital losses of crypto assets at the CGT labels on your tax return
  • if you made a capital gain, report it at 'Total current year capital gains' and 'Net capital gains'
  • if you made a capital loss, report it at ‘Net capital losses carried forward to later income years’
  • if you’re reporting over $10,000 in capital gains and completing the CGT schedule with your tax return, report capital gains and losses at ‘Other CGT assets and any other CGT events’.

You can work out your CGT using our CGT calculator and record keeping tool. Alternatively, you can find a reputable Australian crypto assets tax calculator to sync your exchange and wallet accounts to assist in calculating your CGT.

Report capital gains and losses

You must report 'disposals' of crypto assets for CGT purposes if you:

• exchange one crypto asset for another crypto asset, including activities like depositing your crypto assets into liquidity pools and wrapping
• trade, sell or gift crypto assets
• convert crypto assets to a fiat currency – for example, to Australian dollars.

Transaction fees paid in fiat currency can be included in the cost base of the crypto asset you disposed of. However, if your crypto holding reduces during a transfer due to using crypto to cover the fee, the transaction fee is also a disposal and has CGT consequences.

You have a CGT obligation even if you:

• use the proceeds from selling crypto assets to buy more crypto assets
• don’t convert the proceeds into fiat currency – for example, Australian dollars.

If you transfer crypto assets from one wallet to another wallet while maintaining ownership of it, it’s not a disposal for tax purposes and doesn’t need to be reported.

Personal use assets

Crypto assets are usually considered an investment and not a personal use item.

Even if you use your crypto asset investments to buy personal items, this won’t change it from being an investment. This includes exchanging crypto assets for Australian dollars or gift cards or using an online payment gateway to buy personal items.

 

When you get a crypto asset and use it in a short period of time to buy personal items, it could be a personal use asset.

A capital gain on the disposal of a crypto asset is exempt if:

• the crypto asset is a personal use asset that’s mainly kept or used to purchase personal items
• you got your personal use crypto asset for less than $10,000.

For more information about personal use assets, see Crypto asset as a personal use asset.

Calculate CGT correctly

If your crypto assets are held as an investment, you may pay tax on your net capital gains for the year.

To calculate your CGT use your total capital gain:

• subtract any capital losses
• subtract your entitlement to any CGT discount on your capital gain.

Note: Before calculating your capital gain or loss, convert your crypto purchases and disposals into Australian dollars (A$).

When you purchase crypto assets in a fiat currency and transfer the crypto assets for another, the amount of the original purchase in the fiat currency forms part of your cost base.

 

If you acquire crypto by exchanging it for other crypto, the cost base of the original crypto you disposed of in the exchange is the market value in A$ at the time it was acquired.

Capital losses

If you dispose of your crypto assets for less than it cost you, you may have a capital loss. Capital losses can be used to reduce your capital gains in the current or future income years.

Make sure you report the loss in your tax return so you have it available to offset future capital gains. For more information see How to work out and report CGT on crypto.

This is a general summary only.

For more information:

• see Crypto asset investments
• working out your capital gain see Capital gains tax.