Australian Tax Reporting technical details (also applies to the USA I think)

[Guest]

Hi guys...  I'm trying to work out how to record my crypto capital gains( or losses) for this tax year just finished.  What to actually put into a spreadsheet is a bit mysterious to me just now...  I would welcome any opinions and discussion.

These are my current (mis?)understandings:

• Every crypto trade (even Altcoin to Altcoin) is a tax event even if it doesn't go back to AUD.  You need to work out its equivelant value in AUD to track gains and losses.
• The tax man is eagerly after crypto profits and not reporting isn't an option since the exchange's may be forced to give trade histories and also wallet addresses are required reporting by the ATO (Aust Tax Office). You could gamble that Kraken won't help the ATO but if they do, even in five years time, the ATO can go back through records and rip you a new one...   Also it's in the nature of public blockchain that one wallet leads to another, leads to another, etc....    I'm just gonna pay my tax and sleep soundly.
• some folk think anything less than 10k AUD value is exempt but they haven't read the rules properly...  that's only in very specific circumstances and is open to interpretation (that the ATO is unlikely to be generous with...)
• crypto held for more than a year has the CG halved
• The safest way to manage crypto CG (capital gains) is to FIFO (first in first out). High volume traders might want to LIFO but that's only in special cases.
• Generally I believe CG losses can offset CG gains in the year
• The recording must have the AUD equivalents (which can be from price graph records on major exchanges) AND wallet addresses.

So working within that lot of constraints I've tried to envision what my Excel Spreadsheet should have in it...   and it's a friggen mess.    

Some issues that I can see but don't know the answer to:

1. The price can vary significantly on any particular day so is it ok to just use say Coingecko info ( which may be different to what I paid or received)?
2. I'm thinking of ignoring fees and spreads and just looking at actual received result.  Eg: sell Bitcoin for XRP and although I paid both spread and exchange fee....   just calc BTC sale value by:  Actual XRP received  x   AUD XRP rate.
3. How the heck am I going to keep track of the FIFO end of things...  does my head in....

The current columns I have been considering are:

Date, Time, From Currency, To Curcy, From AUD Rate, To AUD rate, From Amt, To Amt, CG hold days, CG profit, CG loss, Site, From Wallet, To wallet.

 

As you can see it's not simple and some of that is a bit unclear to me.  I figure that if I can get a sheet with actual CG profits and loss I can save a fair amount of accountancy fees.  It presumably will also help me know when it's OK to do this "sell all crypto to move crypto into a SMSF" thing I'm planning on...

Has anyone tackled all this as yet?

Edited July 5, 2018 by Guest

[Prometheus_Rising]

Just finished last week......... ?

I ended up using cointracking.info. 200 trades for free. I was way over that so I had to pay extra.

Calculates all trades in AUD and other currencys, dca calculations, dashboard etc

Even on that site it was hard due to the inconsistent api/csv outputs from different exchanges. Some include withdrawls/deposits some don't, so manual entries are still needed. 

The site takes into account CG (12 month time frame using fifo, filo, etc)and can output PDF and xls reports.

I am glad it is over. No more margin trades on Poloniex lol.

My accountant was happy enough

HODL from now on. 

Good luck ?

 

[Guest]

11 minutes ago, Prometheus_Rising said:

Just finished last week......... ?

I ended up using cointracking.info. 200 trades for free. I was way over that so I had to pay extra.

Calculates all trades in AUD and other currencys, dca calculations, dashboard etc

Even on that site it was hard due to the inconsistent api/csv outputs from different exchanges. Some include withdrawls/deposits some don't, so manual entries are still needed. 

The site takes into account CG (12 month time frame using fifo, filo, etc)and can output PDF and xls reports.

I am glad it is over. No more margin trades on Poloniex lol.

My accountant was happy enough

HODL from now on. 

Good luck ?

 

That's an awesome service but I tried it a few months ago and I seemed to be doing so much manually that I ended up putting it into the "too hard" basket.  Maybe I should reconsider.

May I ask....   if it's not too much trouble can you post the headers that you gave your accountant?  Ie the columns that would be in a spreadsheet?  ( If it's too emotionally traumatic to revisit that info I would completely understand....    )

So I assume you ended up paying your marginal tax rate on half of your capital gains?     Have you considered that if you move your crypto into a SMSF the rate will be 15%?   That would need a complete sale of the crypto, then a transfer into SMSF of AUD, then the SMSF buys the crypto again,  but hopefully not at too much of a loss.   (You might be lucky and buy the dip...  No tax on that gain....   ). You then have incurred a tax cost on your personal gains but you can defer that till the May of the next year I think.

 

[Prometheus_Rising]

I'll post the headers later tonight. 

I only got into trading July 2017 so no capital gains discount yet. I set up a discretionary trust up ($400)and transfered 70% of my investments (no nèed to sell on exchange) during the last dip and therefore ended the year with a small loss. I thought about a SMSF but I am not waiting until retirement age to retire ?and I like to have control/flexibility with my assets/profits.

Now any stocks, crypto, realestate etc will be aquired by my trust and can be distributed to family members as needed. Beneficiaries then pay the tax with 50% CG discount after 12 months. ☺

 

[Guest]

3 minutes ago, Prometheus_Rising said:

I only got into trading July 2017 so no capital gains discount yet.

Me too.   I think we are treading the same path.   

[Prometheus_Rising]

Headers as requested.

 

Edited July 5, 2018 by Prometheus_Rising
double entry

[Guest]

26 minutes ago, Prometheus_Rising said:

Headers as requested.

Thanks very much for that Prom Rising.  That’s an excellent start for my sheet.  I really appreciate you revisiting this painful subject.     

[Prometheus_Rising]

1 minute ago, Tinyaccount said:

Thanks very much for that Prom Rising.  That’s an excellent start for my sheet.  I really appreciate you revisiting this painful subject.     

No problem. Hope you enjoy the experience!

[Guest]

I use cointracking and happy to pay for the service, moving into the next financial year it is worth exploring if it would meet your requirements.

Migrating your existing trade history in can be painful, I also faced allot of manual review / corrections. However, once this was done the first time I have not face any further problems maintaining records, I also appreciate you do not have to provide any personal details for the service / pay in crypto.

Prior to last financial year I was using a google sheet that took in prices from coinmarketcap, defiantly happy I made the change  On another note, make sure to find a good accountant worth firing of a few questions in advance to make sure they understand the topic, try to avoid hr block ect. 

[RDS]

14 hours ago, Tinyaccount said:

Hi guys...  I'm trying to work out how to record my crypto capital gains( or losses) for this tax year just finished.  What to actually put into a spreadsheet is a bit mysterious to me just now...  I would welcome any opinions and discussion.

These are my current (mis?)understandings:

• Every crypto trade (even Altcoin to Altcoin) is a tax event even if it doesn't go back to AUD.  You need to work out its equivelant value in AUD to track gains and losses.
• The tax man is eagerly after crypto profits and not reporting isn't an option since the exchange's may be forced to give trade histories and also wallet addresses are required reporting by the ATO (Aust Tax Office). You could gamble that Kraken won't help the ATO but if they do, even in five years time, the ATO can go back through records and rip you a new one...   Also it's in the nature of public blockchain that one wallet leads to another, leads to another, etc....    I'm just gonna pay my tax and sleep soundly.
• some folk think anything less than 10k AUD value is exempt but they haven't read the rules properly...  that's only in very specific circumstances and is open to interpretation (that the ATO is unlikely to be generous with...)
• crypto held for more than a year has the CG halved
• The safest way to manage crypto CG (capital gains) is to FIFO (first in first out). High volume traders might want to LIFO but that's only in special cases.
• Generally I believe CG losses can offset CG gains in the year
• The recording must have the AUD equivalents (which can be from price graph records on major exchanges) AND wallet addresses.

So working within that lot of constraints I've tried to envision what my Excel Spreadsheet should have in it...   and it's a friggen mess.    

Some issues that I can see but don't know the answer to:

1. The price can vary significantly on any particular day so is it ok to just use say Coingecko info ( which may be different to what I paid or received)?
2. I'm thinking of ignoring fees and spreads and just looking at actual received result.  Eg: sell Bitcoin for XRP and although I paid both spread and exchange fee....   just calc BTC sale value by:  Actual XRP received  x   AUD XRP rate.
3. How the heck am I going to keep track of the FIFO end of things...  does my head in....

The current columns I have been considering are:

Date, Time, From Currency, To Curcy, From AUD Rate, To AUD rate, From Amt, To Amt, CG hold days, CG profit, CG loss, Site, From Wallet, To wallet.

 

As you can see it's not simple and some of that is a bit unclear to me.  I figure that if I can get a sheet with actual CG profits and loss I can save a fair amount of accountancy fees.  It presumably will also help me know when it's OK to do this "sell all crypto to move crypto into a SMSF" thing I'm planning on...

Has anyone tackled all this as yet?

Hi  Mate, Have u tried website cointracking.info ..? I have heard its helpful by exporting csv files and tax calculation point of view but few changes may required as its not Australian tax and financial year based. Still try if u find it beneficial..