Reports said that the Australian Taxation Office (ATO) has outlined crypto capital gains as one of four key areas of focus in 2022.
It has been reported that a capital gain or loss refers to the price difference between the time an asset was purchased and the time it was sold. The percentage owed to the ATO varies between income brackets and duration of ownership, but in general, the rate is reduced for assets held longer than 12 months.
However, the ATO, which has fired off many warnings to crypto investors over the past few years, has also directly mentioned nonfungible tokens (NFTs) as an asset class that will be scrutinized for correct tax reporting.
The report said that according to a Monday announcement, alongside capital gains from crypto, property, and shares, the ATO will also look at record-keeping, work-related expenses, and rental property income/deductions. With the prices of most crypto assets suffering from major losses in 2022, the ATO noted that any sold crypto asset, including NFTs, needs to have a calculated capital gain or loss recorded with it and will be “taking firm action” to deal with taxpayers who try to falsify their records.
Likewise, ATO assistant commissioner Tim Loh also suggested that the taxation body already has a fair idea of people’s investment activity but urged everyone to keep diligent records to avoid any penalties.
“While we receive and match a lot of information on rental income, foreign-sourced income, and capital gains events involving shares, crypto assets, or property, we don’t pre-fill all of that information for you.”
Thus, Loh further said:
“Crypto is a popular type of asset and we expect to see more capital gains or capital losses reported in tax returns this year. Remember you can’t offset your crypto losses against your salary and wages. Through our data collection processes, we know that many Aussies are buying, selling, or exchanging digital coins and assets so it’s important people understand what this means for their tax obligations.”