Capital gains from cryptocurrencies is one of four key areas for the Australian Revenue Office

Capital gains from cryptocurrencies is one of four key areas for the Australian Revenue Office

The Australian Taxation Office (ATO) has pinpointed cryptocurrency capital gains as one of four key areas of focus in 2022.

A capital gain or loss refers to the difference in price between the time an asset was purchased and the time it was sold. The percentage that must be paid to the ATO varies depending on income brackets and length of ownership, but in general, the rate is reduced for assets held for more than 12 months.

the ATOwhich has issued many warnings to crypto investors in recent years, it has also directly mentioned non-fungible tokens (NFTs) as an asset class that will be scrutinized for proper tax reporting.

According to Monday’s announcement, In addition to capital gains from cryptocurrencies, property, and stocks, the ATO will also examine record keeping, work-related expenses, and property rental income/deductions.

Since the prices of most crypto assets are taking heavy losses in 2022, The ATO noted that any crypto asset sold, including NFTs, needs to have a calculated capital gain or loss recorded with it and will be “taking strong action” to deal with taxpayers trying to falsify its records.

The Deputy Commissioner of the ATO, Tim Loh, also suggested that the tax body already has a fair idea of ​​people’s investment activity, but urged everyone to keep diligent records to avoid any penalties, stating:

“Although we receive and collate a lot of information about rental income, foreign-source income, and capital gains involving stocks, crypto assets, or property, we do not pre-populate all of that information for you.”

Loh also pointed out that the ATO has seen a significant increase in local cryptocurrency investors who may not be aware of the correct methods of filing:

“Cryptocurrencies are a popular asset class and we expect to see more capital gains or losses reported on tax returns this year. Remember that you cannot offset your cryptocurrency losses with your salary.”

“Through our data collection processes, we know that many Australians are buying, selling or trading digital currencies and assets, so it is important that people understand what this means for their tax obligations,” he added.

Read:  Blockchain analytics service Nansen to incorporate DeFi Arbitrum protocol

Keep reading:

Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.