Following on from Crypto Currency – what you need to know, here’s the crypto-asset record keeping that the Australian Taxation Office (ATO) will expect from you.
Regardless of whether or not you have made a capital gain or loss, you will need to keep records of each of your crypto transactions and assets, including:
- Receipts of when you transfer or buy crypto-assets
- Exchange records
- Records of any agent, accountant and legal costs
- Digital wallet records and keys
- Software costs related to managing your tax affairs
You’ll need to maintain these records and details for each crypto-asset since they are deemed separate Capital Gains Tax (CGT) assets.
For your crypto-asset transaction, records need to be kept which include:
- Date of the transaction
- The value of the crypto-asset at the time of the transaction – in Australian dollars
- What the transaction was for and who it was with – this can be just the other party’s crypto-asset address
Crypto-asset records will need to be kept for five years from the later of when you prepare or obtain the records, when the transactions or acts are complete, or the year that the CGT event happens. Overall records should be kept long enough to also cover the period of review or amendment period.
Your crypto-asset records must be in English or translatable to English, and in writing although this may be paper or electronic.
Be wary of crypto washing
The ATO are scrutinising the practice of ‘crypto washing’ where investors are selling off crypto currency at the end of one financial year to utilise losses in that financial year, and then buying the crypto currency back immediately, in the new financial year. Should the ATO identify this behaviour then the loss will be rejected from the taxpayers individual tax return.
What’s next?
Overall, crypto is a fast moving new form of currency so it’s important you stay on top of your responsibilities. Contact your New Leaf Advisory should you have further questions relating to crypto-assets in general and your record keeping requirements specifically.
