We are experts in cryptocurrency taxation and can help you when it comes to tax time. A crypto accountant is a specialised accountant who provides accounting and tax services to individuals and businesses dealing with cryptocurrencies. Our team of experienced crypto accountants is dedicated to helping our clients navigate the complex world of cryptocurrency taxation, compliance, and reporting. With our expertise, you can rest assured that your cryptocurrency transactions are handled accurately and efficiently.
We are experts in cryptocurrency taxation and can help you when it comes to tax time. A crypto accountant is a specialised accountant who provides accounting and tax services to individuals and businesses dealing with cryptocurrencies. Our team of experienced crypto accountants is dedicated to helping our clients navigate the complex world of cryptocurrency taxation, compliance, and reporting. With our expertise, you can rest assured that your cryptocurrency transactions are handled accurately and efficiently.
Anyone who buys, sells, trades, or mines cryptocurrencies should consider working with a crypto accountant. This includes individual investors, traders, businesses, and organisations that deal with cryptocurrency transactions. Our team of crypto accountants can help you with everything from tax planning and compliance to financial reporting and analysis.
A crypto accountant is a financial professional who specialises in cryptocurrency accounting and taxation. They have in-depth knowledge of the unique tax laws and regulations surrounding cryptocurrencies and can help you navigate the complex world of cryptocurrency transactions. At our firm, our crypto accountants stay up to date on the latest industry developments to ensure that our clients receive the best possible advice and guidance.
Cryptocurrency transactions can be complex and confusing, with tax implications that can vary widely depending on the specific circumstances. Working with a crypto accountant can help you avoid costly mistakes and ensure that your cryptocurrency transactions are handled in compliance with all applicable tax laws and regulations. Our team of crypto accountants can provide you with the guidance and support you need to manage your cryptocurrency transactions with confidence.
A crypto accountant works by providing a range of accounting and tax services to clients who deal with cryptocurrencies. This may include preparing and filing tax returns, advising on tax planning and compliance, providing financial reporting and analysis, and more. At our firm, our crypto accountants work closely with clients to understand their unique needs and develop customised solutions that meet their specific requirements.
You should consider working with a crypto accountant whenever you engage in cryptocurrency transactions that have tax implications. This may include buying, selling, trading, or mining cryptocurrencies. Additionally, businesses that accept cryptocurrencies as payment may also benefit from working with a crypto accountant. Our team of experienced crypto accountants can help you navigate the complex world of cryptocurrency taxation and compliance, no matter what your specific needs may be.
At our firm, we understand the unique challenges that come with managing cryptocurrency transactions. That’s why we offer a range of specialised accounting and tax services specifically tailored to meet the needs of individuals and businesses dealing with cryptocurrencies. Our team of experienced crypto accountants can help you navigate the complex world of cryptocurrency taxation and compliance, so you can focus on what you do best – growing your business.
Cryptocurrency is decentralized digital money that’s based on blockchain technology. The most famous are Bitcoin (Innovated in 2008 first traded in 2009) and Ethereum
A cryptocurrency is a medium of exchange that is digital, encrypted and decentralized.
It was first designed to be a system to trade goods (buy and sell) however speculative trading in Cryptocurrencies has become a significant driver in their trading.
The best illustration of their working is the examination of how they came to be.
Firstly, they were designed to be a currency of exchange.
Secondly the were designed to avoid the traditional existing banking systems of the world.
Thirdly they were designed to operate in the digital world.
Finally, in order to gain traction and in acknowledgment of the proven secure traditional banking world they had to prove they were secure. This goal was achieved by the use of a Blockchain.
A Blockchain is simply a ledger where every record has a number and the records are updated simultaneously as transactions are entered with each blockchain member having access to the updated data. Transactions are entered into the system in ‘blocks’ but only after they are verified. The verification is undertaken via complex algorithm mathematics with the verifier receiving bonus cryptocurrency.
The verification process is undertaken by mining (proof of work) or Staking (Proof of Stake) which guarantees the security of the blockchain. Whilst verification earns bonus cryptocurrency, fraudulent mining or staking results in losses to the provider. The security within this Blockchain system is extremely high.
The verification of blocks and individual transactions entering the system can take from 10 minutes to 2 hours and requires a large computing and power resources from the verifier (thus the bonus).
In addition to earning cryptocurrency from the verification process, you can simply buy them on an exchange.
Cryptocurrencies are intangible. Ownership is like a key that allows you to move a unit of measure from one person to the next.
Presently, cryptocurrencies are not generally accepted by the majority of retailers, although their use is growing. As with cash and credit cards you will need a Crypto wallet.
The first point of note about Chrypto’s is their extreme volatility and by extension their extreme speculative risk. To illustrate here is a list of Bitcoin price variations during 2021.
Due to these large unit costs it is possible to purchase a part of one unit in crypto’s.
The first step is to choose a platform between traditional brokers and specialist Crypto exchanges.
The most appropriate platform depends on your needs in the following areas:
Once you have considered the need and benefits of the service provider you choose, you simply need to provide the funds to undertake a transaction.
Once acquired you store your crypto’s in a hot or cold wallet which is a matter of internal online or external offline software. This is critical because the Crypto’s are simply numbers (like keys) and if misplaced cannot be recovered.
Like Cybersecurity, fraud in the crypto world is on the rise. Common sense and checking of all untested processes and following the steps below is the best defence. Once you have acquired a crypto, the internal blockchain security is extremely strong however it is the processes entering and leaving where funds can go astray.
Being a new asset and intangible, the taxation of gains made on cryptocurrency’s have tested traditional taxation theory.
The fact that it is called a currency does not qualify it as one from the ATO perspective. The technical argument being that it is not recognised as a “currency” by any sovereign government, which has now been proven incorrect with recognition by the El Salvador now in place.
However, until there is a new ruling, the realised gains made will be taxed as a capital or revenue gain depending on the circumstances. Obviously, there is an attraction for the capital gains route due to the gains being taxed after a 50% discount.
This stance is also supported by case law.
That said, if there is no income can be derived from the holding of the crypto’s then it would appear reasonable to argue that the intention in buying was a profit making undertaking meaning the gains should be treated as a revenue gain.
If trading is limited to one transaction with a cost of less than $10,000 then it may be arguable that the assets was for “personal use” and exempt from capital gains. This is tenuous with the form of personal use being educational and of general interest in a new fad. Given crypto’s are traded in small doses with many transactions this argument would be defeated if the normal trading was the score.
As with share trading there is also consideration that a large scale or transactions (Volume and or Value) could suggest the trading was a business which would then involve recognition of inventory holdings. As with share trading, this would be rare but a necessary consideration in certain circumstances which you would think would be obvious.
Crypto mining, staking and trading seems to be most successful with numerous smaller transactions. Accounting for movements is a critical area which can involve many transactions with not all transactions being simply in and out. Beside Exchange reporting, specialist software is available to assist report your activity accurately.
Crypto currency trading is a targeted area for ATO auditing and follow up.
It is important to note that they have very large resources and data sharing facilities such that non disclosure is not (and never should be) an option.
If you want to no more about Crypto’s give us a call.
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Our Perth business accountants are an experienced and committed team of tax consultants and advisors who combine their depth of expertise and experience you’d expect to find in a large tax accounting firm with the personal understanding and flexibility that only a boutique practice can deliver.
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