Crypto Accounting Setup Complete!

By bengy | Idle Musings | 4 Jan 2022


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There is no nice way to say this... but crypto accounting in Australia (and other Capital Gains Tax jurisdictions) is politely described as poop... or as a pain in the arse. Capital Gains requires a crapload more tracking of exact prices for incoming and outgoing trades and things like that, but it has the advantage that if you are just holding for long periods of time, you aren't having to pay a yearly percentage for that privilege. The Netherlands does a single percentage tax on a snapshot at the changeover of the annual tax period, which means that you don't need to do more than a single accounting snapshot of your complete holdings once in the year (or more often if you don't want to stress out near the end of the year!)... however, that means that you need to pay an amount each year to just stay in the game.

Either way has its own little benefits and downsides... I have to say that was particularly partial to the Dutch way of doing things as it meant that I could be really lazy about actually staying on top of exact prices and transaction fees and all of that minutiae that is just a real pain! That in itself was worth just paying the "stay in the game" taxation at the end of the year!

However, now that we have moved to Australia... we have to play by the Capital Gains Tax rules. Which means that I have spent the first week of jet-lag setting up the basis in Cointracking from which all our future trades and sales can be calculated from. I had checked with the Australian Tax Office and various crypto-specialised accountants in Australia and they had all given me the solid advice that all crypto assets would transfer to myself at the cost basis at the moment we touched down and became Australian tax residents again. Thank goodness for that... because it would have been a right pain in the arse to go back and try and figure out what everything was originally bought for! Plus, at the moment, we are significantly higher pricewise than most other points in the past... which means that I'm working from a higher initial cost basis... which means less profit from this point, which means that the taxation is calculated from a higher cost basis (I pay less tax on profits...).

So... two huge pluses by entering at this time.

However, this will all be for naught if I don't set up the initial transfer of assets in the Cointracking software right at the start. And then set up the automatic imports (either through APIs or blockchain scans) so that my manual work is minimised. Thankfully, most of the major exchanges are supported via API imports by Cointracking... There is only a few exchanges that I use that will require manual imports about once a month or so...

Unfortunately for me, the Binance API is playing up with Cointracking... it is weird, as I had tested it out a month ago and it was working fine. Sadly, I'm doing the support line ping-pong between the two companies to try and figure out where and what the problem is. I would REALLY like that one to be automated as it is an exchange that I tend to use a fair bit... but on the other hand, a single manual CSV import once or twice a month isn't going to kill me.... but I would prefer NOT to!

So... today, I finally managed to complete the starting import and automation. The manual imports have been learnt and I know how to do them relatively quickly... probably getting quicker as I go. It is likely that I will eventually have to upgrade to a higher transaction limit for Cointracking... at the moment, I'm on the Lifetime 20,000 limit.... but it looks like I will burn through that in about a month or two (thanks mainly to the FTX margin lending reporting). Still... spending for a higher or unlimited lifetime account might just be worthwhile!

So... here is hoping that everything holds together and I don't end up ripping out what is left of my hair in frustration! The next few weeks will be just keeping a close eye on the automated parts and seeing if it tracks closely to the real values or not. I have high hopes... but you never know. I also hope that I have managed to set up everything in a logical and orderly manner. That sort of initial setup can really make a huge difference in the long run!

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I can also be found cross-posting at:
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Handy Crypto Tools

Ledger Nano S/X: Keep your crypto safe and offline with the leading hardware wallet provider. Not your keys, not your crypto!
Binance: My first choice of centralised exchange, featuring a wide variety of crypto and savings products.
Kucoin: My second choice in exchanges, many tokens listed here that you can't get on Binance!
FTX: Regulated US-based exchange with some pretty interesting and useful discounts on trading and withdrawal fees for FTT holders. Decent fiat on-ramp as well!
MXC: Listings of lots of interesting tokens that are usually only available on DEXs. Avoid high gas prices!
Huobi: One of the largest exchanges in the world, some very interesting listings and early access sales through Primelist.
Gate.io: If you are after some of the weirdest and strangest tokens, this is one of the easiest off-chain places to get them!
Coinbase: If you need a regulated and safe environment to trade, this is the first exchange for most newcomers!
Crypto.com: Mixed feelings, but they have the BEST looking VISA debit card in existence! Seriously, it is beautiful!
CoinList: Access to early investor and crowdsale of vetted and reserached projects.
Cointracking: Automated or manual tracking of crypto for accounting and taxation reports.
Stoic: A USD maximisation bot trading on Binance using long-term long strategies, powered by the AI/human system of Cindicator.
StakeDAO: Decentralised pooled staking of PoS assets.
Poloniex: One of the older regulated exchanges that has come into new ownership. I used to use it quite a lot, but have since stopped.
Bitfinex: Ahhh... another oldie, but a goodie exchange. Most noted for the close affiliation with USDT and the Basic "no-KYC" tier!

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bengy
bengy

I am a Musician (Violinist/Violist) specialising in Early Music living in The Netherlands. I have a background in Mathematics and Physics due to an earlier tertiary level study... and so, I'm still quite interested in Science and Technology related stuff!


Idle Musings
Idle Musings

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