If you are familiar with capital gains tax then it should not be hard to work out how tax is calculated for the transactions
I am very familiar with this and it applies, but that's not the only tax law that applies and here in Australia one can't pick and choose what tax laws to apply, the ATO does that.
It's not simple, not even close to simple, and each person's tax situation is different depending on many factors. With crypto...Well, I was on the phone with my accountant for an hour (he charges me for this) and we were no closer to determining a way forward other than the fact he needs to do what he can to keep me from being investigated by the ATO.
There is no way to simplify this situation, here in Australia, despite that being what we'd all like. I know people like to over simplify it, but in reality just about every tax accountant in the country is scratching his/her head. The las is the law and the ATO will enforce it, despiite what we, as tax payers, want.
That is true. The law is the law. Because I am not privy to the details of transactions your accountant is trying to apply tax law is would be hard to give a detailed opinion on how it will apply to your selling, swapping or anything else along that line.
When you say there are other tax law that applies, can you give me that particular transaction? i.e. staking implications? sale of tokens? transfer of tokens to an exchange? or as you outlined briefly the implied gains to having tokens in an exchange?
I am very much interested in how it applies to you since I live in Oz too.
All of the above, including investment tax and others as outlined on the ATO website.
Based on my understanding of crypto and tax implicaitons.
If you are earning tokens because you are staking. On the day you are rewarded, the market value of the token when it hits your wallets will be ordinary income (this is not capital gains), in turn this will be the cost base of the token. The thinking is for you to get that token to begin with you would have to had spent an amount of money to gain it.
That same token once you sell it later, you will need to work out how much you got it for (which is the cost base - market value when you got it) versus what end up selling it for, either a gain or a loss. This is then a capital gain.
As for having it in an exchange. If you never transfer it to anyone else but yourself I do not see any tax implications since you are not getting anything in return. It's all about transfer of ownership. I can basically have 10 wallets and transfer my tokens to any of them as much as I want and not have to pay tax on transferring between my wallets since it is still me that owns them but the moment I transfer it to someone else then there is an ownership change, triggering CGT.
These are my understanding of what we all face when we own crypto.
I think it's best you find an accountant, or you can go it alone I guess, we'll each approach it in our own way, as will the ATO.
Thanks for your commenting, I like the engagement.
Hey no problem man. Tax is one of my hobbies so if you ever want some more nonsense re its application. Don't hesitate to bug me. Am sure the blind leading the blind will eventually find that burning bush.
No worries, I figured that. I've been with my accounting firm for 20 years though, so I tend to stick with their ideas on things. I pay them enough for it, might as well make use of it.
https://www.ato.gov.au/Individuals/Investments-and-assets/Crypto-asset-investments/Transactions---acquiring-and-disposing-of-crypto-assets/Staking-rewards-and-airdrops/