Consolidated Tax/ATO discussion thread

Discussion in 'Blockchain & Cryptocurrency Mining' started by whatdoesthisdo, Jan 24, 2018.

  1. Jag_Guy

    Jag_Guy Member

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    This is obviously not financial advice and just what I have been told. If anyone is trading in crypto I'd highly recommend paying a good accountant to properly go over it with you. You're much better off spending $500 - $1,500 to have a good accountant do your tax returns rather than a $80 5 min tax refund job...not just to optimise your taxes but to ensure that you comply properly with everything.

    My accountant has told me that in general the ATO treats anything over $20k per annum is considered a business and not a hobby. That however is for the purposes of defining something as a business with a ABN etc etc, not whether the activity is taxable per se.

    As far as taxable income goes, I would treat crypto the same as if you were to work 10hrs at a Supermarket in addition to your normal full time job. If you get paid $200 then that needs to be declared at tax time, and your accountant (if you have a good one) will tell you what deductions you can make as far as electricity and hardware costs go, then roll the profits (if any) in with your other incomes to give you the best outcome.
     
  2. josh_676

    josh_676 Member

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    I can recommend Stooge007 as someone to have a formal chat to in that regard. We worked on structuring in 2017, and sure I got stung with a big tax bill that year, but when all the people who tried to dodge tax got letter in 18 and 19, I was happy, knowing I'd done the right thing.
     
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  3. Stooge007

    Stooge007 Member

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    cheers mate :)
     
  4. Thelen

    Thelen Member

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    Ouch. I cashed out Dec 2017 during the peak back then, I think 1x10k and a couple smaller 9k ish from the 1.1 coin I sold, I didn't declare and didn't have any problems. Not advising one way or the other, but perhaps my strong history of reasonable returns and having paid something like 30k tax already that year had something to do with it.

    OFC it might still come around sometime, then I'll have to ask myself whether to fight it or not. ATM my stance is, I bought it in 2010 for lols, you could say hobby, and I sold it later. Gov is wrong to apply tax retroactively, not dis-similar to those against the gov changing the tax rules around franking where a lot of people's retirement plans revolve around that income. But hey just my opinion
     
  5. Stooge007

    Stooge007 Member

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    ATO 100% can go back as far as it wants to assess you in instances of fraud or evasion

    of course the ATO does not have the resources to catch everybody that dodges tax, but usually interest increases when crypto is in the media more
     
  6. adamsleath

    adamsleath Member

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    it is up to the person to declare their incomes etc.

    small fish don't seem to attract much attention (it seems), but it does happen. and the fines for incorrect reporting can be a bitch.
     
  7. Stooge007

    Stooge007 Member

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    yep, it's a "self-assessment" regime, but the ATO can deem assessments on you, and then it's up to you to object to it

    fines and penalties are one thing, you'll also likely be on the ATO radar for the foreseeable future as well
     
  8. Jaco

    Jaco Member

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    I saved this the other day (it might be in the links you were shown already, I haven't checked)

    As I've pulled out a considerable amount this year and I've been trying to work out how much the government's going to snatch from me - but my route is Hobby Miner, not claiming anything


    Screenshot_20210118-020740_Chrome~01.jpg


    Therefore no tax comes on the mined coins, if I trade it into FIAT and pull it out, then in theory it'll just add onto my total income amount for the year and put me in said appropriate tax bracket

    Which possibly means I'd owe about 8-9k in tax on top of what my work has already paid

    Here's hoping...
     
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  9. Jaco

    Jaco Member

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    Haven't even been able to find a specific thread on Reddit or other either about pure-and-simple real world examples

    Like,

    I mined 10 Ethereum and pulled it out during the last pump, the ATO got me for XX in tax that year


    4uarlp.jpg
     
  10. Stooge007

    Stooge007 Member

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    there is also a taxable event every time you trade the mined coins into other coins before cashing out to fiat (if applicable)
     
  11. Jaco

    Jaco Member

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    For sure, it sucks to be an Accountant if you're a daily trader and have a million lines of entries in your Exchanges log

    One of my friends trades some Eth into BTC on occasion and such, whereas myself I just mine what I want to have
     
  12. Stooge007

    Stooge007 Member

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    a few of my clients use - https://www.cointracker.io/

    seems to work OK
     
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  13. quannum

    quannum Member

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    That’s a very neat product! I like it!
     
  14. flain

    flain Member

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    So question - say you purchased Bitcoin back in 2013 and used it to buy meat from honestbeef.com.au (no longer the same site as 2013 - it was a Bitcoin accepting butcher / meat service). Forgot for years you still had balance in your Bitcoin wallet (via the actual Bitcoin core app) and then only checked it when Bitcoin was in the news again.

    Clearly I never intended it to be an investment, but now a few coins is worth a lot. Would I need to pay capital gains if I cash it out?
     
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  15. dirkmirk

    dirkmirk Member

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    You have a few bitcoin?

    Lucky bastard, seems like most people who make a killing on bitcoin is by accident.

    That being said Im not sure I or the ATO would buy your story:p.

    Their wasn't clarity around bitcoin in the 2013/14 tax year IIRC.

    Maybe just cash out and dont say anything, see what happens:confused:
     
    Last edited: Feb 21, 2021
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  16. Optimus.

    Optimus. Member

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    Congrats on your windfall! You'll def need to declare the CGT event but on the plus side if you've held that long it's only going to be 25% taxed. If it's significant $$$$$, there's ways to minimise tax a bit more but you'll want to talk to a professional about that.

    The CGT event is when you sell, not bought.
     
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  17. flain

    flain Member

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    Thanks guys, I’ll get a professional. I’m mostly concerned that a lot of accountants might not be experienced in the crypto thing. I’m sitting on enough to pay my home loan off now which otherwise will take 11-12 years..

    Back when I was buying meat my average order size was $300, I would generally buy $1000 of BTC at a time then slowly use it over a bunch of orders. Honest beef was kind of cool - you would pay a flat rate per kg (about $10) regardless of cut. They’d wait until enough orders were placed to slaughter a cow, and do it based on that demand (so sometimes there was a lead time of a week). I kind of miss it honestly :/
     
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  18. Gunna

    Gunna Member

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    They don't have to be experienced in crypto, it's just the same as any other CGT asset
     
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  19. mr camouflage

    mr camouflage Member

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    Why is it only 25% taxed? As I understand it, you can claim a 50% discount on the capital gains amount for owning longer than a year, and the rest is classed as income and taxed at whatever tax bracket you fall in. eg Flain could cash out $100,000 of bitcoin and only $50,000 would count as taxable income

    Flain, there's a CGT calculator here which will show you how much you are up for in CGT.
    You might find that you can save some tax if you only sell enough to remain in the same tax bracket for this year, then sell off some more after June in the next tax year.
     
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  20. Stooge007

    Stooge007 Member

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    $100k capital gain x 50% CGT discount = $50k added to taxable income

    assumed top marginal tax rate ~ $25k in tax payable (25% tax)
     

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