Tim Loh, assistant commissioner at ATO, stated that you cannot offset crypto losses against your wages and salary. The Australian Taxation Office (ATO), has identified crypto capital gains among four areas of focus for 2022.
Capital gain or loss is the difference in the value of an asset between its purchase and its sale. While the percentage due to the ATO can vary depending on income brackets and the length of ownership, it is generally lower for assets that have been held for more than 12 months.
Over the past few years, the ATO has issued many warnings crypto investors. It has also explicitly mentioned nonfungible tokens, (NFTs), as an asset type that will be closely examined for accurate tax reporting.
A Monday announcement stated that in addition to capital gains from crypto, shares and property, the ATO will also examine record-keeping, work-related expenses, and rental income/deductions.
The ATO stated that crypto assets are suffering major losses in 2022. It noted that every sale of crypto assets, including NFTs must have a calculated capital gain and loss. They will also be “taking firm actions” against taxpayers who attempt to falsify their records.
Tim Loh, ATO assistant commissioner, suggested that the taxation authority already has a fair idea about people’s investments. However, he urged everyone to keep meticulous records to avoid any penalties.
We don’t have all the information we need to match information about rental income, foreign income and capital gains events involving shares or crypto assets.
Loh noted that ATO has seen an increase in local crypto investors, who may not know the correct reporting methods .
“Crypto is a very popular asset type and we expect to see more capital gains and capital losses reported in tax returns for this year.” You can’t offset crypto losses against your wages and salary.
He said, “We know that many Australians are buying, trading, or exchanging digital assets and coins through our data collection processes so it’s important for people to understand what this means regarding their tax obligations.”
