A tax expert’s tips on claiming crypto losses on tax, and how to work out capital gai

So, you’ve bought crypto. You’re not alone. Though the statistics are inexact, some surveys suggest as many as 21% of Australian adults now own crypto assets (and that a further 8% have owned them in the past).

If you managed to make gains in the past year, you may need to pay extra tax. Or you may be able to use losses to offset other gains you have made.

The tricky part is working out those gains or losses. This isn’t based just on when you convert your crypto assets into Australian dollars. Every transaction – or what the tax office calls a “disposal” – triggers a taxable point. So you need to keep track of these.

How the tax office treats crypto assets
The Australian Tax Office treats cryptocurrency holdings like other investment assets, such as company shares or real estate.

In general, if its market value (in Australian dollars) when you dispose of your crypto is greater than when you bought it, you’ve made a capital gain. If it’s lower, you’ve made a loss.

How capital gains are taxed differ for businesses and professional traders. But for individuals – “mum and dad” investors – the key point is that capital gains tax is effectively the same as income tax. A capital gain is added to your assessable income, and therefore to the income tax you owe.

A capital loss can be offset against capital gains but not against other assessable income. If you have no capital gains in a given year, the loss can be carried forward to a future year.

The key issue, then, is how to calculate your net capital gain – by working out the capital gain or loss for each “taxable event”.

Read more: Almost no one uses Bitcoin as currency, new data proves. It's actually more like gambling

How do I record my gains (or losses)
Generally, from the tax office’s perspective, a taxable event occurs every time you dispose or transact with crypto – whether that be paying for goods or services, swapping it for another crypto asset, gifting it, or converting it into cash.

The big exception to this is if you use cryptocurrency as actual currency, to buy goods for personal use – such as a meal, concert ticket or white goods for your home. If you use crypto to buy a personal use asset for less than A$10,000, you can usually disregard the capital gain. This is known as the personal use exemption.

However, there are rules around this to prevent gaming the system.

The longer you’ve held crypto, the more likely the tax office is to regard it as an investment, and deny the exemption. It doesn’t provide any specific time frame but the example on its website mentions longer than six months as indicating the crypto is being held an investment.

For everything else, any crypto disposal is a taxable event, even if it doesn’t involve conversion to fiat currency (in our case, Australian dollars).

Calculating the capital gain
Let’s consider a scenario where you decided to swap one crypto asset for another.

Say you bought A$1,000 worth of the world’s second-largest cryptocurrency, Ether, in late 2020 when it was trading at about A$1,000 a unit.

In early 2023, when Ether’s market value hits A$3,000, you decided to swap it all for the world’s largest cryptocurrency, Bitcoin (perhaps because you thought Bitcoin had better long-term prospects).

That transaction wouldn’t have involved Australian dollars – but the tax office still expects you to report the capital gain as if it had.

So what was the capital gain on that hypothetical transaction?

It is the difference between the market value (in Australian dollars) of the Ether when bought (A$1,000) and the market value of the Bitcoin acquired (A$3So, you’ve bought crypto. You’re not alone. Though the statistics are inexact, some surveys suggest as many as 21% of Australian adults now own crypto assets (and that a further 8% have owned them in the past).

If you managed to make gains in the past year, you may need to pay extra tax. Or you may be able to use losses to offset other gains you have made.

The tricky part is working out those gains or losses. This isn’t based just on when you convert your crypto assets into Australian dollars. Every transaction – or what the tax office calls a “disposal” – triggers a taxable point. So you need to keep track of these.

How the tax office treats crypto assets
The Australian Tax Office treats cryptocurrency holdings like other investment assets, such as company shares or real estate.

In general, if its market value (in Australian dollars) when you dispose of your crypto is greater than when you bought it, you’ve made a capital gain. If it’s lower, you’ve made a loss.

How capital gains are taxed differ for businesses and professional traders. But for individuals – “mum and dad” investors – the key point is that capital gains tax is effectively the same as income tax. A capital gain is added to your assessable income, and therefore to the income tax you owe.

A capital loss can be offset against capital gains but not against other assessable income. If you have no capital gains in a given year, the loss can be carried forward to a future year.

The key issue, then, is how to calculate your net capital gain – by working out the capital gain or loss for each “taxable event”.

Read more: Almost no one uses Bitcoin as currency, new data proves. It's actually more like gambling

How do I record my gains (or losses)
Generally, from the tax office’s perspective, a taxable event occurs every time you dispose or transact with crypto – whether that be paying for goods or services, swapping it for another crypto asset, gifting it, or converting it into cash.

The big exception to this is if you use cryptocurrency as actual currency, to buy goods for personal use – such as a meal, concert ticket or white goods for your home. If you use crypto to buy a personal use asset for less than A$10,000, you can usually disregard the capital gain. This is known as the personal use exemption.

However, there are rules around this to prevent gaming the system.

The longer you’ve held crypto, the more likely the tax office is to regard it as an investment, and deny the exemption. It doesn’t provide any specific time frame but the example on its website mentions longer than six months as indicating the crypto is being held an investment.

For everything else, any crypto disposal is a taxable event, even if it doesn’t involve conversion to fiat currency (in our case, Australian dollars).

Calculating the capital gain
Let’s consider a scenario where you decided to swap one crypto asset for another.

Say you bought A$1,000 worth of the world’s second-largest cryptocurrency, Ether, in late 2020 when it was trading at about A$1,000 a unit.

In early 2023, when Ether’s market value hits A$3,000, you decided to swap it all for the world’s largest cryptocurrency, Bitcoin (perhaps because you thought Bitcoin had better long-term prospects).

That transaction wouldn’t have involved Australian dollars – but the tax office still expects you to report the capital gain as if it had.

So what was the capital gain on that hypothetical transaction?

It is the difference between the market value (in Australian dollars) of the Ether when bought (A$1,000) and the market value of the Bitcoin acquired (A$3So, you’ve bought crypto. You’re not alone. Though the statistics are inexact, some surveys suggest as many as 21% of Australian adults now own crypto assets (and that a further 8% have owned them in the past).

If you managed to make gains in the past year, you may need to pay extra tax. Or you may be able to use losses to offset other gains you have made.

The tricky part is working out those gains or losses. This isn’t based just on when you convert your crypto assets into Australian dollars. Every transaction – or what the tax office calls a “disposal” – triggers a taxable point. So you need to keep track of these.

How the tax office treats crypto assets
The Australian Tax Office treats cryptocurrency holdings like other investment assets, such as company shares or real estate.

In general, if its market value (in Australian dollars) when you dispose of your crypto is greater than when you bought it, you’ve made a capital gain. If it’s lower, you’ve made a loss.

How capital gains are taxed differ for businesses and professional traders. But for individuals – “mum and dad” investors – the key point is that capital gains tax is effectively the same as income tax. A capital gain is added to your assessable income, and therefore to the income tax you owe.

A capital loss can be offset against capital gains but not against other assessable income. If you have no capital gains in a given year, the loss can be carried forward to a future year.

The key issue, then, is how to calculate your net capital gain – by working out the capital gain or loss for each “taxable event”.

Read more: Almost no one uses Bitcoin as currency, new data proves. It's actually more like gambling

How do I record my gains (or losses)
Generally, from the tax office’s perspective, a taxable event occurs every time you dispose or transact with crypto – whether that be paying for goods or services, swapping it for another crypto asset, gifting it, or converting it into cash.

The big exception to this is if you use cryptocurrency as actual currency, to buy goods for personal use – such as a meal, concert ticket or white goods for your home. If you use crypto to buy a personal use asset for less than A$10,000, you can usually disregard the capital gain. This is known as the personal use exemption.

However, there are rules around this to prevent gaming the system.

The longer you’ve held crypto, the more likely the tax office is to regard it as an investment, and deny the exemption. It doesn’t provide any specific time frame but the example on its website mentions longer than six months as indicating the crypto is being held an investment.

For everything else, any crypto disposal is a taxable event, even if it doesn’t involve conversion to fiat currency (in our case, Australian dollars).

Calculating the capital gain
Let’s consider a scenario where you decided to swap one crypto asset for another.

Say you bought A$1,000 worth of the world’s second-largest cryptocurrency, Ether, in late 2020 when it was trading at about A$1,000 a unit.

In early 2023, when Ether’s market value hits A$3,000, you decided to swap it all for the world’s largest cryptocurrency, Bitcoin (perhaps because you thought Bitcoin had better long-term prospects).

That transaction wouldn’t have involved Australian dollars – but the tax office still expects you to report the capital gain as if it had.

So what was the capital gain on that hypothetical transaction?

It is the difference between the market value (in Australian dollars) of the Ether when bought (A$1,000) and the market value of the Bitcoin acquired (A$3So, you’ve bought crypto. You’re not alone. Though the statistics are inexact, some surveys suggest as many as 21% of Australian adults now own crypto assets (and that a further 8% have owned them in the past).

If you managed to make gains in the past year, you may need to pay extra tax. Or you may be able to use losses to offset other gains you have made.

The tricky part is working outyou convert your crypto assets into Australian dollars. Every transaction – or what the tax office calls a “disposal” – triggers a taxable point. So you need to keep track of these.

How the tax office treats crypto assets
The Australian Tax Office treats cryptocurrency holdings like other investment assets, such as company shares or real estate.

In general, if its market value (in Australian dollars) when you dispose of your crypto is greater than when you bought it, you’ve made a capital gain. If it’s lower, you’ve made a loss.

How capital gains are taxed differ for businesses and professional traders. But for individuals – “mum and dad” investors – the key point is that capital gains tax is effectively the same as income tax. A capital gain is added to your assessable income, and therefore to the income tax you owe.

A capital loss can be offset against capital gains but not against other assessable income. If you have no capital gains in a given year, the loss can be carried forward to a future year.

The key issue, then, is how to calculate your net capital gain – by working out the capital gain or loss for each “taxable event”.

Read more: Almost no one uses Bitcoin as currency, new data proves. It's actually more like gambling

How do I record my gains (or losses)
Generally, from the tax office’s perspective, a taxable event occurs every time you dispose or transact with crypto – whether that be paying for goods or services, swapping it for another crypto asset, gifting it, or converting it into cash.

The big exception to this is if you use cryptocurrency as actual currency, to buy goods for personal use – such as a meal, concert ticket or white goods for your home. If you use crypto to buy a personal use asset for less than A$10,000, you can usually disregard the capital gain. This is known as the personal use exemption.

However, there are rules around this to prevent gaming the system.

The longer you’ve held crypto, the more likely the tax office is to regard it as an investment, and deny the exemption. It doesn’t provide any specific time frame but the example on its website mentions longer than six months as indicating the crypto is being held an investment.

For everything else, any crypto disposal is a taxable event, even if it doesn’t involve conversion to fiat currency (in our case, Australian dollars).

Calculating the capital gain
Let’s consider a scenario where you decided to swap one crypto asset for another.

Say you bought A$1,000 worth of the world’s second-largest cryptocurrency, Ether, in late 2020 when it was trading at about A$1,000 a unit.

In early 2023, when Ether’s market value hits A$3,000, you decided to swap it all for the world’s largest cryptocurrency, Bitcoin (perhaps because you thought Bitcoin had better long-term prospects).

That transaction wouldn’t have involved Australian dollars – but the tax office still expects you to report the capital gain as if it had.

So what was the capital gain on that hypothetical transaction?

It is the difference between the market value (in Australian dollars) of the Ether when bought (A$1,000) and the market value of the Bitcoin acquired (A$3So, you’ve bought crypto. You’re not alone. Though the statistics are inexact, some surveys suggest as many as 21% of Australian adults now own crypto assets (and that a further 8% have owned them in the past).

If you managed to make gains in the past year, you may need to pay extra tax. Or you may be able to use losses to offset other gains you have made.

The tricky part is working out those gains or losses. This isn’t based just on when you convert your crypto assets into Australian dollars. Every transaction – or what the tax office calls a “disposal” – triggers a taxable point. So you need to keep track of these.

How the tax office treats crypto assets
The Australian Tax Office treats cryptocurrency holdings like other investment assets, such as company shares or real estate.

In general, if its market value (in Australian dollars) when you dispose of your crypto is greater than when you bought it, you’ve made a capital gain. If it’s lower, you’ve made a loss.

How capital gains are taxed differ for businesses and professional traders. But for individuals – “mum and dad” investors – the key point is that capital gains tax is effectively the same as income tax. A capital gain is added to your assessable income, and therefore to the income tax you owe.

A capital loss can be offset against capital gains but not against other assessable income. If you have no capital gains in a given year, the loss can be carri forward to a future year.

The key issue, then, io calculate your net capital gain – by working out the capital gain or loss for each “taxable event”.

Read more: Almost no one uses Bitcoin as currency, new data proves. It's actually more like gambling

How do I record my gains (or losses)
Generally, from the tax office’s perspective, a taxable event occurs every time you dispose or transact with crypto – whether that be paying for goods or services, swapping it for another crypto asset, gifting it, or converting it into cash.

The big exception to this is if you use cryptocurrency as actual currency, to buy goods for personal use – such as a meal, concert ticket or white goods for your home. If you use crypto to buy a personal use asset for less than A$10,000, you can usually disregard the capital gain. This is known a

Say you bought A$1,000 worth of the world’s second-largest cryptocurrency, Ether, in late 2020 when it was trading at about A$1,000 a unit.

In early 2023, when Ether’s market value hits A$3,000, you decided to swap it all for the world’s largest cryptocurrency, Bitcoin (perhaps because you thought Bitcoin had better long-term prospects).

That transaction wouldn’t have involved Australian dollars – but the tax office still expects you to report the capital gain as if it had.

So what was the capital gain on that hypothetical transaction?

It is the difference between the market value (in Australian dollars) of the Ether when bought (A$1,000) and the market value of the Bitcoin acquired (A$3So, you’ve bought crypto. You’re not alone. Though the statistics are inexact, some surveys suggest as many as 21% of Australian adults now own crypto assets (and that a further 8% have owned them in the past).

If you managed to make gains in the past year, you may need to pay extra tax. Or you may be able to use losses to offset other gains you have made.

The tricky part is working out those gains or losses. This isn’t based just on when you convert your crypto assets into Australian dollars. Every transaction – or what the tax office calls a “disposal” – triggers a taxable point. So you need to keep track of these.

How the tax office treats crypto assets
The Australian Tax Office treats cryptocurrency holdings like other investment assets, such as company shares or real estate.

In general, if its market value (in Australian dollars) when you dispose of your crypto is greater than when you bought it, you’ve made a capital gain. If it’s lower, you’ve made a loss.

How capital gains are taxed differ for businesses and professional traders. But for individuals – “mum and dad” investors – the key point is that capital gains tax is effectively the same as income tax. A capital gain is added to your assessable income, and therefore to the income tax you owe.

A capital loss can be offset against capital gains but not against other assessable income. If you have no capital gains in a given year, the loss can be carried forward to a future year.

The key issue, then, is how to calculate your net capital gain – by working out the capital gain or loss for each “taxable event”.

Read more: Almost no one uses Bitcoin as currency, new data proves. It's actually more like gambling

How do I record my gains (or losses)
Generally, from the tax office’s perspective, a taxable event occurs every time you dispose or transact with crypto – whether that be paying for goods or services, swapping it for another crypto asset, gifting it, or converting it into cash.

The big exception to this is if you use cryptocurrency as actual currency, to buy goods for personal use – such as a meal, concert ticket or white goods for your home. If you use crypto to buy a personal use asset for less than A$10,000, you can usually disregard the capital gain. This is known as the personal use exemption.

However, there are rules around this to prevent gaming the system.

The longer you’ve held crypto, the more likely the tax office is to regard it as an investment, and deny the exemption. It doesn’t provide any specific time frame but the example on its website mentions longer than six months as indicating the crypto is being held an investment.

For everything else, any crypto disposal is a taxable event, even if it doesn’t involve conversion to fiat currency (in our case, Australian dollars).

Calculating the capital gain
Let’s consider a scenario where you decided to swap one crypto asset for another.

Say you bought A$1,000 worth of the world’s second-largest cryptocurrency, Ether, in late 2020 when it was trading at about A$1,000 a unit.

In early 2023, when Ether’s market value hits A$3,000, you decided to swap it all for the world’s largest cryptocurrency, Bitcoin (perhaps because you thought Bitcoin had better long-term prospects).

That transaction wouldn’t have involved Australian dollars – but the tax office still expects you to report the capital gain as if it had.

So what was the capital gain on that hypothetical transaction?

It is the difference between the market value (in Australian dollars) of the Ether when bought (A$1,000) and the market value of the Bitcoin acquired (A$3So, you’ve bought crypto. You’re not alone. Though the statistics are inexact, some surveys suggest as many as 21% of Australian adults now own crypto assets (and that a further 8% have owned them in the past).

If you managed to make gains in the past year, you may need to pay extra tax. Or you may be able to use losses to offset other gains you have made.

The tricky part is working out those gains or losses. This isn’t based just on when you convert your crypto assets into Australian dollars. Every transaction – or what the tax office calls a “disposal” – triggers a taxable point. So you need to keep track of these.

How the tax office treats crypto assets
The Australian Tax Office treats cryptocurrency holdings like other investment assets, such as company shares or real estate.

In general, if its market value (in Australian dollars) when you dispose of your crypto is greater than when you bought it, you’ve made a capital gain. If it’s lower, you’ve made a loss.

How capital gains are taxed differ for businesses and professional traders. But for individuals – “mum and dad” investors – the key point is that capital gains tax is effectively the same as income tax. A capital gain is added to your assessable income, and therefore to the income tax you owe.

A capital loss can be offset against capital gains but not against other assessable income. If you have no capital gains in a given year, the loss can be carried forward to a future year.

The key issue, then, is how to calculate your net capital gain – by working out the capital gain or loss for each “taxable event”.

Read more: Almost no one uses Bitcoin as currency, new data proves. It's actually more like gambling

How do I record my gains (or losses)
Generally, from the tax office’s perspective, a taxable event occurs every time you dispose or transact with crypto – whether that be paying for goods or services, swapping it for another crypto asset, gifting it, or converting it into cash.

The big exception to this is if you use cryptocurrency as actual currency, to buy goods for personal use – such as a meal, concert ticket or white goods for your home. If you use crypto to buy a personal use asset for less than A$10,000, you can usually disregard the capital gain. This is known as the personal use exemption.

However, there are rules around this to prevent gaming the system.

The longer you’ve held crypto, the more likely the tax office is to regard it as an investment, and deny the exemption. It doesn’t provide any specific time frame but the example on its website mentions longer than six months as indicating the crypto is being held an investment.

For everything else, any crypto disposal is a taxable event, even if it doesn’t involve conversion to fiat currency (in our case, Australian dollars).

Calculating the capital gain
Let’s consider a scenario where you decided to swap one crypto asset for another.

Say you bought A$1,000 worth of the world’s second-largest cryptocurrency, Ether, in late 2020 when it was trading at about A$1,000 a unit.

In early 2023, when Ether’s market value hits A$3,000, you decided to swap it all for the world’s largest cryptocurrency, Bitcoin (perhaps because you thought Bitcoin had better long-term prospects).

That transaction wouldn’t have involved Australian dollars – but the tax office still expects you to report the capital gain as if it had.

So what was the capital gain on that hypothetical transaction?

It is the difference between the market value (in Australian dollars) of the Ether when bought (A$1,000) and the market value of the Bitcoin acquired (A$3So, you’ve bought crypto. You’re not alone. Though the statistics are inexact, some surveys suggest as many as 21% of Australian adults now own crypto assets (and that a further 8% have owned them in the past).

If you managed to make gains in the past year, you may need to pay extra tax. Or you may be able to use losses to offset other gains you have made.

The tricky part is working out those gains or losses. This isn’t based just on when you convert your crypto assets into Australian dollars. Every transaction – or what the tax office calls a “disposal” – triggers a taxable point. So you need to keep track of these.

How the tax office treats crypto assets
The Australian Tax Office treats cryptocurrency holdings like other investment assets, such as company shares or real estate.

In general, if its market value (in Australian dollars) when you dispose of your crypto is greater than when you bought it, you’ve made a capital gain. If it’s lower, you’ve made a loss.

How capital gains are taxed differ for businesses and professional traders. But for individuals – “mum and dad” investors – the key point is that capital gains tax is effectively the same as income tax. A capital gain is added to your assessable income, and therefore to the income tax you owe.

A capital loss can be offset against capital gains but not against other assessable income. If you have no capital gains in a given year, the loss can be carried forward to a future year.

The key issue, then, is how to calculate your net capital gain – by working out the capital gain or loss for each “taxable event”.

Read more: Almost no one uses Bitcoin as currency, new data proves. It's actually more like gambling

How do I record my gains (or losses)
Generally, from the tax office’s perspective, a taxable event occurs every time you dispose or transact with crypto – whether that be paying for goods or services, swapping it for another crypto asset, gifting it, or converting it into cash.

The big exception to this is if you use cryptocurrency as actual currency, to buy goods for personal use – such as a meal, concert ticket or white goods for your home. If you use crypto to buy a personal use asset for less than A$10,000, you can usually disregard the capital gain. This is known as the personal use exemption.

However, there are rules around this to prevent gaming the system.

The longer you’ve held crypto, the more likely the tax office is to regard it as an investment, and deny the exemption. It doesn’t provide any specific time frame but the example on its website mentions longer than six months as indicating the crypto is being held an investment.

For everything else, any crypto disposal is a taxable event, even if it doesn’t involve conversion to fiat currency (in our case, Australian dollars).

Calculating the capital gain
Let’s consider a scenario where you decided to swap one crypto asset for another.

Say you bought A$1,000 worth of the world’s second-largest cryptocurrency, Ether, in late 2020 when it was trading at about A$1,000 a unit.

In early 2023, when Ether’s market value hits A$3,000, you decided to swap it all for the world’s largest cryptocurrency, Bitcoin (perhaps because you thought Bitcoin had better long-term prospects).

That transaction wouldn’t have involved Australian dollars – but the tax office still expects you to report the capital gain as if it had.

So what was the capital gain on that hypothetical transaction?

It is the difference between the market value (in Australian dollars) of the Ether when bought (A$1,000) and the market value of the Bitcoin acquired (A$3So, you’ve bought crypto. You’re not alone. Though the statistics are inexact, some surveys suggest as many as 21% of Australian adults now own crypto assets (and that a further 8% have owned them in the past).

If you managed to make gains in the past year, you may need to pay extra tax. Or you may be able to use losses to offset other gains you have made.







So what was the capital gain on that hypothetical t