When you buy or sell shares on the stock market, or trade in cryptocurrencies, you are liable to pay tax on any profits you derive from this activity. However, the amount on which you are taxed, the rate of tax, and the ultimate sum owing to the ATO (if any), can depend on a variety of different factors.
At Ashmans Accounting, we have specialists on our team with wide ranging experience in the field of capital gains tax accounting, particularly as it pertains to stock market investments and the trading of cryptocurrencies, such as Bitcoin, Litecoin, Ripple and Ethereum.
We can advise on how to ensure you are reporting correctly, how to plan for the best tax outcomes, and how to assess the potential impact of any capital gains on your upcoming tax return.
We’ve put together some commonly asked questions to give you more information about our services.
When you sell shares, you will either have a capital profit or a capital loss. If you sell shares for less than you paid for them (including brokerage costs), you can claim a capital loss, which can be used to offset any capital gains, but not other income, e.g., your salary.
You may be liable for tax when you sell or trade a cryptocurrency if that transaction is what the ATO calls a taxable event, i.e., when you trade crypto for fiat currency, trade one crypto for another, use a crypto to purchase goods or service, or mine cryptocurrency as a means of earning income.
If you hold shares or crypto for at least 12 months and then go on to sell them at a profit, you are entitled to a 50% discount on any capital gains tax that is payable. You should also include any capital losses before you apply the discount.