ATO warning on cryptocurrency returns

CAPITAL gains from crypto assets are a key focus of the Australian Taxation Office in 2022 as the agency looks to crack down on the mistakes the public are making.

The ATO announced its four priority areas for this year on Monday and singled out crypto as a potential concern.

ATO assistant commissioner Tim Loh said crypto was one of the “problem areas where we see people making mistakes”.

“Crypto is a popular type of asset and we expect to see more capital gains or capital losses reported in tax returns this year. Remember you can’t offset your crypto losses against your salary and wages.

“Through our data collection processes, we know that many Aussies are buying, selling or exchanging digital coins and assets so it’s important people understand what this means for their tax obligations.”

The ATO said if a person disposed of a crypto asset this financial year, including nonfungible tokens (NFTS), they would need to calculate a capital gain or capital loss and record it in their tax return.

This also applies to property and shares.

The other areas of focus for the agency include recordkeeping, with the ATO saying it will take legal action against anyone who deliberately tries to increase their refund, falsify records or cannot substantiate their claims.

Work-related expenses are another area of interest for the ATO, as are rental income and deductions. Rental property owners are being told to make sure all income received from the rental is in their tax return.