Bitcoin price discussion and analysis

[grah33]

wouldn't mind some tips on tax reporting with bitcoin ...

is it like investing with shares ? declare a number for the gains or losses ?
i'm guessing etfs are the same as shares, more or less

 

[Warr87]

It's an asset. you report your gains/losses. what its value was at the beginning of last financial, price at the end of financial, and any trades that occured inbetween.

 

[qldfrog]

It's an asset. you report your gains/losses. what its value was at the beginning of last financial, price at the end of financial, and any trades that occured inbetween.

My own understanding is nothing to declare until you sell, if you sell look at the capital gain or loss taking into account 12 month discount.
In the same way as shares as an investor...
When filling the mytax on the ato website, there is even a popup reminding you not to forget crypto CG so i assume this is the expected way..
If you day trade crypto in out etc it could be seen differently...but not an expert

 

[grah33]

My own understanding is nothing to declare until you sell, if you sell look at the capital gain or loss taking into account 12 month discount.
In the same way as shares as an investor...
When filling the mytax on the ato website, there is even a popup reminding you not to forget crypto CG so i assume this is the expected way..
If you day trade crypto in out etc it could be seen differently...but not an expert

ok, like shares then, but what do u mean by 12 month discount?

 

[qldfrog]

ok, like shares then, but what do u mean by 12 month discount?

If you jeep share or bitcoin,any asset for more than 12 months you qualify for a 50% discount on capital gain.
This is a relatively well known ATO rule, please consider getting professional advice before filing your tax return ?

 

[qldfrog]

ok, like shares then, but what do u mean by 12 month discount?

Cgt discounts for assets held for more than 12 m?

 

[Warr87]

My own understanding is nothing to declare until you sell, if you sell look at the capital gain or loss taking into account 12 month discount.
In the same way as shares as an investor...
When filling the mytax on the ato website, there is even a popup reminding you not to forget crypto CG so i assume this is the expected way..
If you day trade crypto in out etc it could be seen differently...but not an expert

my accountant asks for my trades, and its value EOFY. so i just follow what she asks for, lol.

 

[over9k]

ok, like shares then, but what do u mean by 12 month discount?

Hold on to it for at least 12 months and you get a 50% capital gains tax discount: https://www.ato.gov.au/Individuals/Capital-gains-tax/CGT-discount/

 

[qldfrog]

Only issue if any mistake he makes, you pay...something which absolutely bamboozled me when i landed in Australia...

 

[grah33]

Only issue if any mistake he makes, you pay...something which absolutely bamboozled me when i landed in Australia...

u mean a small fee to fix incorrectly filled out tax returns?


i'm thinking GOLD etf and other etfs are like shares, and same with bitcoin ethereum etc. work out the final loss or gain for the year. but i wasn't aware of the discount so thanks for that.

 

[grah33]

also what if some units were sold off and were missed in reporting in the financial year before?

 

[over9k]

You can backdate/fix errors up to two years iirc.

 

[grah33]

You can backdate/fix errors up to two years iirc.

You can backdate/fix errors up to two years iirc.

so you'd do the latest tax return excluding the units that were sold off in prior FY, u think? basically, as though you had done it properly before, and doing it properly now.

 

[frugal.rock]

so you'd do the latest tax return excluding the units that were sold off in prior FY, u think? basically, as though you had done it properly before, and doing it properly now.

I would think legally you would need/ should fix the error. Doing what you've suggested of adding on to the next year then creates another error.
1st error may be a honest mistake and get treated as such, however a second error could be ignorance which isn't a defence.
All in my opinion.
It is quite easy to correct a previous year as @over9k stated if you did it through etax.
Not sure if you can correct it yourself using etax if an accountant did it though?

If first error is corrected, obviously it has immediate taxation ramifications, together with knock on implications for anything relying on total income levels, such as government benefits, eg family tax benefit, Centrelink benefits etc

 

[over9k]

so you'd do the latest tax return excluding the units that were sold off in prior FY, u think? basically, as though you had done it properly before, and doing it properly now.

Yes

You need an accountant.

 

[qldfrog]

I would think legally you would need/ should fix the error. Doing what you've suggested of adding on to the next year then creates another error.
1st error may be a honest mistake and get treated as such, however a second error could be ignorance which isn't a defence.
All in my opinion.
It is quite easy to correct a previous year as @over9k stated if you did it through etax.
Not sure if you can correct it yourself using etax if an accountant did it though?

If first error is corrected, obviously it has immediate taxation ramifications, together with knock on implications for anything relying on total income levels, such as government benefits, eg family tax benefit, Centrelink benefits etc

I have issues normally woth trust distribution.where they send you you annual statement in September october whereas you are supposed to do your tax return before.
But as i add these amount as dividends by "error", it is mostly as a disadvantage to myself and do not bother updating the return.
When i discover real errors, i do update the tax return and it is not too hard on the etax/mytax.hooe it helps and not a tax advice

 

[grah33]

Yes

You need an accountant.

there are websites where you do it yourself and they check it for you. much cheaper and better for me i think.

 

[grah33]

I would think legally you would need/ should fix the error. Doing what you've suggested of adding on to the next year then creates another error.
1st error may be a honest mistake and get treated as such, however a second error could be ignorance which isn't a defence.
All in my opinion.
It is quite easy to correct a previous year as @over9k stated if you did it through etax.
Not sure if you can correct it yourself using etax if an accountant did it though?

If first error is corrected, obviously it has immediate taxation ramifications, together with knock on implications for anything relying on total income levels, such as government benefits, eg family tax benefit, Centrelink benefits etc

one approach would be to ignore the units sold before and not reported (ie do this year properly). then fix the year before.

 

[DaveTrade]

The "Real Reason" Crypto Is Crashing?

Crypto and stocks tumbled this morning as a number of bearish forces converged on market sentiment. The first of which being yet another economic downgrade from Goldman Sachs following a previous GDP forecast reduction, issued two weeks ago.

The Wall Street bank trimmed its US GDP outlook, citing “fading fiscal stimulus” and the Delta variant as contributors to a slowed post-Covid recovery.

Goldman economist Ronnie Walker said that there would be a “harder path” forward in a Monday note to clients before revealing a 5.7% GDP growth forecast for 2021, down from Goldman’s already-reduced 6% estimate.

Last week’s disappointing August jobs report caused the bank to shift its labor projection, too. Goldman now expects an unemployment rate of 4.2% (vs. its prior 4.1% prediction) by year’s end.

“The hurdle for strong consumption growth going forward appears much higher: the Delta variant is already weighing on Q3 growth, and fading fiscal stimulus and a slower service sector recovery will both be headwinds in the medium term,” wrote Goldman analysts.

Morgan Stanley also issued a downgrade of its own this morning, classifying U.S. equities as “underweight.”

“We see a bumpy September-October as the final stages of a mid-cycle transition play out,” explained Morgan Stanley strategists.

“We continue to think this is a ‘normal’ cycle, just hotter and faster, and our cycle model remains in ‘expansion’. But the next two months carry an outsized risk to growth, policy and the legislative agenda.”

To add insult to injury, cryptocurrencies crashed shortly after stocks opened for trading. Bitcoin, Ethereum, and virtually all other digital currencies fell double digits shortly before noon. Crypto has more or less tracked the S&P 500 ever since the Covid pandemic began. Today’s selling may have been sparked by a poor morning trading session for stocks.

But the majority of the crypto losses that followed were likely caused by something else, as equities didn’t drop nearly as much as crypto.

The market’s “smart money” – investors armed with inside information – could be dumping their crypto portfolios in anticipation of another financial crisis. This time around, though, it’s not an American company (like Lehman Brothers) causing problems.

Evergrande, China’s second-largest property developer, is to blame.

In addition to being a major real estate developer, Evergrande is also China’s largest issuer of commercial paper (very short-term corporate bonds). It earned this title after the Chinese government banned the company from issuing longer-term debt.

Normally, this wouldn't be an issue. But Evergrande is now well on the path to bankruptcy. Creditors have pooled their resources, taking the company to court in an attempt to settle their debts – something that often precedes a bankruptcy declaration. Evergrande has liquidated assets, even selling its corporate headquarters, to pay said creditors.

Sadly, Evergrande’s efforts will be in vain. The company is essentially doomed to default with billions in debt coming due within the next year. Evergrande’s CEO recently held a press conference in which he projected supreme confidence and insisted that the company was doing just fine.

Lehman’s CEO, Richard S. Fuld Jr., made similar statements prior to Lehman’s epic $600 billion collapse.

The difference now is that everyone can see the Evergrande bankruptcy developing. A bailout from the Chinese government will be required to save the company, which owes roughly $305 billion in debt. As of August 31st, Evergrande only had roughly $355 billion in total assets. That’s enough to pay creditors if it’s able to liquidate everything.

Keep in mind, however, that Evergrande just sold its headquarters for a 66% loss. The reality is that the company won’t be able to liquidate enough assets in time nor for what they're currently valued at.

Bankruptcy looms as a result.

I know what you're asking:

"But what does this mean for crypto?"

Tether, a Hong-Kong based cryptocurrency that tracks the value of the US dollar (called a “stablecoin”), is backed by a significant amount of Chinese commercial paper. In fact, Tether claimed earlier in the year that 50% of its reserves come from commercial paper. How much of it is Chinese or specifically from Evergrande is unclear.

But the team at Tether has been very tight-lipped about the origin of the commercial paper. If it’s not from Evergrande, it’s safe to assume that the Tether execs would’ve said so.

Instead, Tether has kept quiet during Evergrande’s descent into insolvency. CNBC’s Jim Cramer went so far as to call Tether a “ticking timebomb” after anonymous “Chinese sources” told him most of the commercial paper was in fact Chinese.

This matters because Tether accounts for almost 80% of the volume of all crypto transactions. If the commercial paper that backs Tether fails, the actual value of Tether (USDT) could plunge below its 1-to-1, 1 Tether-to-1 US dollar ratio. In addition, the Tether team could also dump its sizable crypto holdings (including Bitcoin) to cover its commercial paper losses, hastening a massive crash as liquidity simultaneously shrinks.

This outcome assumes that China allows Evergrande to bankrupt.

If the Chinese government bails out Evergrande instead, Beijing would become the company’s newest business partner. Recent private sector crackdowns by the CCP suggest that the government would more than happy with this outcome.

Should this happen, China would need to settle those debts with US dollars, not Chinese yuan. This is important as Beijing would then be forced to buy over $300 billion dollars, spiking the value of the dollar in the process.

That could then lead to an overnight “haircut” for all asset classes as the dollar surges, including both crypto and equities. In addition, a bailout may reveal a deeper “shadow banking” industry that involves other major Chinese corporations. There very well could be more companies like Evergrande out there (albeit smaller ones) that have yet to hit critical mass with their toxic debt issuances.

So, either by way of bankruptcy or bailout, 2021’s speculative mania has officially entered hazardous territory. Let’s not forget that a Fed taper is coming down the pipe in the near future as well.

“Smart money” investors could be trying to exit early, prompting this morning's correction. Or, it could simply be a case of waning bullish enthusiasm.

Regardless, Evergrande still poses a significant threat to nearly all investors if it's the latter. And not just those involved with crypto.

Bottom line:

A major reckoning is developing in the Far East and the mainstream financial media hasn’t given Evergrande the emphasis that it deserves. This will all change, of course, when China steps in to save the company and asset values hit a sudden “air pocket.”

But until then, the market will remain focused on the numerous Covid variants threatening to reactivate lockdowns.

Even though a lack of government stimulus has had a far more profound effect on bogging down the US economy, which Goldman (and others) finally admitted this morning despite a far bigger story - the Evergrande bankruptcy - simmering beneath the market's surface.

 

[againsthegrain]

More scare tactics and tightening loop from govt and bankers

Bitcoin traders issue stark warning

A bitcoin trader says she is running out of options after being booted from 90 banks across Australia.

www.news.com.au