Can You Claim Cryptocurrency Losses and Gains in Your Tax Return?

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Can You Claim Cryptocurrency Losses and Gains in
Your Tax Return?
The ATO has issued updated information on
claiming Cryptocurrency losses and gains in your
tax returns. The first thing that needs to
understand is that losses and gains from crypto
are solely stated in your tax return when you get
rid of it, you sell it, turn it into fiat
currency, substitute it for another type of
asset, and purchase something with it, etc. You
cant identify market fluctuations or claim a
loss because of changed crypto assets value
until the loss is crystallised or realised.
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From the disposal of Cryptocurrency, gains and
losses should be stated in your tax return in the
year when the disposal happened. When you
disposed of it, you made a loss on the
cryptocurrency, you can offset the loss against
capital gains you might have (unless the crypto
is considered a personal use asset). However, you
can neutralise capital losses against capital
gains. Unfortunately, you cant offset these
losses opposing to other types of income like
wages and salary. If you dont contain any
capital gains to offset, you can have the losses
and carry them forward for another future year
when you can utilise them. If you made money from
crypto, such as airdrops or staking rewards, then
these also must be reported in your tax return.
Keep one thing in your mind to maintain your
crypto transaction records. The ATO has complex
data matching programs and the major area to
consider is cryptocurrency reporting.
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