Cryptocurrency is subject to taxation as per Capital Gains tax in Australia. If you are selling your cryptocurrency and making a profit out of it, you need to pay taxes as per the profit.
How do calculations in cryptocurrencies work?
There is a need to understand the tax lotsIf you are looking forward to precisely knowing your cryptocurrency tax liability. Tax lots stand for the original cost price, length of duration hold, and the price traded away)
If you are new to cryptocurrency, you must know that cryptocurrencies calculation can be hard if you are not keeping the track of your tax lots. Below we have mentioned aspects in detail the terms that play a big role in calculations:
The initial cost paid for the crypto can also be said as your total investment in procuring including all the other costs. For example, if you purchased a Bitcoin for 10,000AUD, it will be the purchasing cost of the crypto you own.
Sold Cost as per the name itself says the amount at which you dispose of your asset. For example, you sold the bitcoin at 17,000 AUD; it will be the selling cost of the crypto you own.
Length of possession
The length of possession refers to the time duration you hold your crypto asset. It becomes imperative for individuals to understand that holding crypto for more than a year makes them eligible for a 50 per cent capital gains tax discount. It also implies that 50% of the capital addition ought to be incorporated inside assessable pay.
Taxable income incorporates the all-out available pay for the financial year wherein you discarded crypto. It also includes pay or other pay acquired around the same time.
Using the above-mentioned information can be used in determining the cryptocurrency taxation you are entitled to as per the ATO department. We are certified accountants and tax experts holding experience in filing a tax return as per the regulatory guidelines.
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