Invested in Crypto assets? Keep records of each transaction

The most common use of crypto is as an investment, in which case the crypto asset is a capital gains tax (CGT) asset.

If you acquire a crypto asset as an investment, transactions such as disposal or exchange are a CGT event and you may make a:

• Capital gain

• Capital loss, which can reduce capital gains you make, both events need to be included in your tax return.

You cannot deduct a net capital loss from your other income.

You may be able to reduce capital gains using the CGT discount, if you hold your crypto asset for at least 12 months.

If you hold the crypto asset as an investment, it will not be exempt from CGT as a personal use asset.

Personal use crypto asset is exempt from CGT, the most common situation of personal use of crypto assets is to buy items for personal use or consumption.

Keeping records

You must keep records of each of your crypto assets and every transaction, to work out whether you have a made a capital gain or loss. For your crypto assets, you should keep records of:

• The date of the transaction

• The value of the crypto assest in Australian dollars tat the time of the transaction

• That the transaction was for and who the other party was (even if it’s just their crypto asset address).

• Receipts when you buy or transfer crypto assets

• Exchange records

• Records of agent, accountant and legal costs

• Digital wallet records and keys

• Software costs that relate to managing your tax affairs.