Digital Asset Investor
If you only made a few casual trades and your primary intent was for investment purposes, then you are likely considered an investor by the ATO. As an investor, your digital assets are CGT assets, and your capital gains and losses will be calculated.
CategoryDigital Asset Investor
ActivitiesInvestment Low quantity of trades Long hold duration
ImplicationsCGT rules apply
Benefits> 12 month, 50% CGT discount Claim related expenses Possible personal use exemption
The profile of an investor is an individual or entity that is intending to build wealth through long-term capital growth, or by receiving regular dividends and payments from investments. An investor holds any given asset for an extended period, typically 12 months or greater to take advantage of the available CGT discount. There is a fine line between being considered an investor and being considered a trader, and the tax implications between the two are great. If you think that you are trading in a business-like manner then you should check our article on Digital Asset Trading.
- Your intent is to generate wealth through the long-term holding of assets
- You generate income from dividends or other regular payments from the investment
- Your trading activity is low volume and irregular
- You do not regularly monitor, check or adjust your investments
If you are an investor, then you must be aware of the tax implications of owning CGT assets. In highly volatile asset classes such as cryptocurrency, it is critical that you do proper tax-planning to make sure you are not left with a tax bill that you cannot pay.
- > 12 month, 50% CGT discount
- Cryptocurrency is treated as a capital gains asset
- Fees and related expenses are indirectly claimed
- Tax-planning is critical
- Net losses are offset against future capital gains
Kova Tax are specialists in the cryptocurrency taxation and accounting space. When you work with us, you are working with an accounting firm that actually understands crypto and understands how to talk your language. We are passionate about taxation and work diligently to understand each of our clients on an individual basis. Our goal is always to ensure the best outcome for you and bring certainty to your investment activity. Our first consultation is no cost and no obligation, we want to hear your story.
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