Crypto, NFTs in crosshairs as ATO cracks down on digital economy

The Australian Taxation Office intends to put more than your run-of-the-mill work expenses and rental income under the microscope this year.

The ATO is targeting undeclared capital gains from crypto, shares and property in tax returns this year, says assistant commissioner Tim Loh.The ATO says more than 300,000 people have invested in digital coins for the first time this financial year. Through data collection processes, it knows many are trading cryptocurrency.

Those who sell an asset – including property, shares, crypto, or NFTs – are required to calculate any capital gain or loss and record it on their annual tax return. It is generally the difference between what the asset cost you and what you receive when you dispose of it.“Crypto is a popular asset, and we expect to see more capital gains or losses reported in tax returns this year,” Loh says.

A capital loss can only be offset against capital gains from other investments. It cannot be used to reduce tax on other types of income, such as salary.If there are no capital gains to offset losses, the investor can declare the loss in their return and carry it forward, to offset future capital gains.The shift to the digital economy and away from cash accelerated by the COVID-19 pandemic is making it easier for the ATO to follow the money trail back to taxpayers.

jcollett_money I'd rather they focussed on those people and businesses who have 'rorted' the Covid relief schemes, maybe they'll be able to get on top of both !🤔

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