Professional crypto accountant in Melbourne can offer valuable services for those holding cryptocurrency assets. By understanding the tax implications of trading, holding and spending cryptocurrencies, these professionals can help taxpayers minimise their tax liabilities and keep their cryptocurrency investments as tax-effective as possible.
There are a few key things to keep in mind when working with a professional crypto accountant in
Firstly, cryptocurrencies are considered property for tax purposes, meaning any profits or losses from trading or spending them must be declared on your tax return. Secondly, the Australian Taxation Office (ATO) has issued guidance on how to treat cryptocurrency transactions for taxation purposes.
In general, the ATO treats cryptocurrency as either:
– an asset
– a foreign currency
– a commodity.
As an asset, cryptocurrency is subject to capital gains tax (CGT) when it is sold or disposed of. If you hold cryptocurrency as an investment, any profits made from its sale are considered taxable income. Similarly, if you use cryptocurrency to purchase goods or services, the value of the transaction is subject to Goods and Services Tax (GST).
If you treat cryptocurrency as a foreign currency, any profits or losses made from its conversion into Australian dollars are subject to CGT. Similarly, if you use cryptocurrency to purchase goods or services in Australia, the value of the transaction is subject to GST.
If you treat cryptocurrency as a commodity, the ATO expects you to keep records of your transactions in order to calculate any profits or losses made. This includes tracking the cost of acquiring the cryptocurrency, its sale price and any associated costs such as brokerage fees.
Professional crypto accountants can help taxpayers determine how to best report their cryptocurrency transactions for tax purposes. By taking into account your specific circumstances and ensuring you are compliant with ATO guidance, they can help you minimize your tax liabilities and make the most of your cryptocurrency investments.