Crypto capital gains are one of four important areas of focus for the Australian Taxation Office (ATO) in 2022.
According to a Monday release, the ATO will examine record-keeping and work-related expenses. Also included is rental property income/deduction in addition to capital gains from crypto, property, and shares.
The ATO issued numerous warnings to crypto investors in recent years. It also specifically listed nonfungible tokens (NFTs) as an asset type that they will review for proper tax reporting.
Australian Taxation Office on capital loss – What’s it about?
A capital gain or loss is the difference in price between when purchasing an asset and when selling it. The proportion owing to the Australian Taxation Office varies depending on income category and length of ownership. But in general, the rate is lower for assets under ownership for more than 12 months.
Tim Loh, ATO assistant commissioner, also stated that the taxing authority already had a good notion of people’s investment activities, but urged everyone to keep meticulous records to avoid penalties.
“While we receive and match a lot of information on rental income, foreign-sourced income, and capital gains events involving shares, crypto assets, or property, we don’t pre-fill all of that information for you,” he said.
‘Taking firm action’
Furthermore, with most crypto assets seeing significant losses in 2022, the ATO stated that any sold crypto asset, including NFTs, must have a calculated capital gain or loss recorded with it, and that it will be “taking firm action” against taxpayers who attempt to falsify their records.
The ATO witnessed a considerable increase in local crypto investors. These investors may not be aware of the proper reporting processes, according to Loh.
“Through our data collection processes, we know that many Aussies are buying, selling, or exchanging digital coins and assets so it’s important people understand what this means for their tax obligations,” Loh said.