Capital Gains Tax Losses?!??

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Slogging, still slogging through the accounting for Australia... now that I have gotten much better with the sorting and all of that with Cointracking, it is going much much faster. I've mostly caught all the bugs and misreported things... there is still a chunk to do, but I'm now getting through them much much quicker and with better accuracy. There are still occasional moments when things are a little unclear, but I will generally err on the cautious side and report too much instead of too little. In most of these cases, the amounts are pretty small anyway.. and despite all the hackiness of the accounting state (due to the crappy way that things are standardised... and the somewhat onerous reporting requirements under a capital gains systems even for incredibly trivial transactions.)

Honestly, it really is a pain in the arse... and I'm not even a trader, nor someone with obscene amounts of digital assets. So, it should be pretty straight-forward for me in comparison to others! That said, probably, the whale-sized people would be able to hire people and specialised tools to handle their affairs... sigh. In fact, there were moments where I thought that I should just throw it all in... and cash out. Just to stop having to deal with the tax implications and accounting tracking. It really really is that painful!

Anyway, when I moved countries, I had to establish a cost basis for everything crypto to be able to report capital gains and losses if I ever decided to sell anything. I had asked around several accountants and the Australian Tax Office as well... I like to do things properly, it makes for much less headaches later... and I was told that the cost basis for everything would be essentially the price that everything was on the day that we touched down back in Australia. Okay... that makes things a lot easier, as I had never had to track cost-basis or anything like that whilst in Europe. I could have imagined that it would be quite painful to try and recover historical prices....

... So, due to a stroke of good fortune... we arrived back into our hideous tax system at the peak of the last bull market... so, the prices at which our cost basis is set is quite high in comparison to prices at the moment. So, everything that I have sold in the last couple of years has resulted in a capital gains LOSS! Funny... in the short term, that means that we aren't needing to pay anything in capital gains tax which does make our tax return much easier and friendlier to our bank account! I will have to look to see if you can carry those losses forward... on the off chance that we hit a bull market again!

On the down side, that also meant that airdrops like Optimism (OP) and ongoing things like staking and blogging were worth more... and that counts as income. So, that means on that side of things, we have to pay income tax on those things. But seeing as we arrived halfway through a tax year... it isn't so painful, as we were earning zero for at least half a year!

Anyway, once this flurry of accounting and tracking down of bugs and misreporting is done... I'm going to have to be really much more disciplined with the accounting. That said, I have to be much more disciplined with the regular accounting as well. Much of this is making sure that I have a process and structure in place to easily report invoices/expenses and everything else. I'm starting to get that set up properly, but until it is complete, it is a bit of feeling like I'm batting off a million things at the same time as they come in... or worse, leaving everything to pile up until it becomes a huge headache.

So, that is my task for this year... catch up and then stay ahead of the accounting game... both in crypto and also regular life.

I can also be found cross-posting at:
Hive
Steem
Publish0x

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