We are often asked, what expenses can I claim for my cryptocurrency activity? The answer will depend on whether you are classified as an investor or a trader of cryptocurrency. Profit from both investor's and traders' sales of cryptocurrency is…
Category: Cryptocurrency Trading
Cant pay your tax?
Many of our clients made some profits in the crypto market during the 2022 Financial year (from 1 April 2021 to 31 March 2022), and now they have to pay taxes which are due by 7 April 2023. But, some…
Implications of Cryptocurrency as Excepted Financial Arrangements
In March 2022, IRD released a new bill that classifies cryptocurrency as excepted financial arrangements (EFA). This was the same bill that removed GST from most cryptocurrencies and is retrospectively applied to 1 January 2009. The classification of cryptocurrencies as…
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IRD Guidance on Airdrops
This month, IRD finally published guidance regarding the taxable treatment of airdrops. What is an airdrop? An airdrop is a distribution of tokens without compensation (i.e., for free), generally with a view to increasing awareness of a new token, particularly…
Claiming Cryptocurrency Tax Losses to 31 March 2022
The 2022 financial year has had wild price fluctuations. We all experienced record price highs before Christmas, and then a significant pullback in prices in early 2022. No doubt, some taxpayers have traded at the top of the market, triggering…
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Benefits of Frequent Financial Reporting for your Cryptocurrency Activity
We’ve been preparing quarterly financial reports for several clients over the past 12 months and have found the reports and process extremely helpful. The key benefits are: Addressing reconciliation issues during the year in small chunks rather than once at the end…
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How Trading Cryptocurrency Affects Profitability – Part 2 of 2
This is part 2 of our series of articles 'how a trade can go from bad to worse'. We recommend reading part 1 which outlines this core concept, and this latest article builds on the foundational principle. All tokens of…
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How a trade can go from bad to worse – tax implications of making cryptocurrency trades – Part 1 of 2
This article outlines how a loss-making crypto trade may result in a combined profit (and subsequent tax to pay). Yes, this may seem strange, almost unfair, and the entire cryptocurrency portfolio including historical cost basis needs to be considered. We…