I have some crypto on a ledger. I don't want to sell it and pay tax can I simply transfer it to etoro or similar and then buy some ETF. However I'm not sure how etoro works I don't want to leave assets on a server.
I just don't want to pay CGT till I cash out and want to move some assets into ETF's
ATO will still know if Etoro is regulated
Meant to pay CGT on each transaction, even if it is between alt coins ;) Might be worth reading the crypto specific ATO CGT details :P
https://www.ato.gov.au/general/gen/tax-treatment-of-crypto-c…
"CGT event occurs when: trade or exchange cryptocurrency (including the disposal of one cryptocurrency for another cryptocurrency)"
"If you dispose of one cryptocurrency to acquire another cryptocurrency, you dispose of one CGT asset and acquire another CGT asset."
Their data matching ability is pretty extensive:
https://www.ato.gov.au/General/Gen/Cryptocurrency-2014-15-to…
If you don’t want to pay cgt then just leave it in your ledger. As per above selling and buying an etf is cashing out
Here is a way to avoid taxes.
Digital asset > deposit on a lending platform > take out a CDP/borrow stablecoin > Tx stablecoin to CEX > convert stablecoin to fiat money > Tx fiat to bank account > Tx fiat to etoro > use fiat to buy ETF > done.
Can you give me some more info on this
Pretty sure there's a few CGT events there which would get reported to the ato
The whole point with the process is that it's a one-way conversion. The conversion has a small net loss that is tax-deductible if the user chooses to take advantage of it.
I think you are saying you stake your coin then borrow against it.
And you never sell the coin or repay the loan?
I agree that wouldn’t be a CGT event.
After that, the additional steps to cash out aren’t meaningful CGT events as the price won’t have moved much.
I don’t know the rules around staking and borrowing against it, is there a way to make the loaned asset the only recourse?
Hi there, but is it also risky that your deposit could get liquidated if your original deposit falls below collateral level required?
Eg. Deposit $1000 of btc, borrow $500 usdc, stake $500 usdc. If btc falls to $600, your deposit automatically gets liquidated?
Well that kinda sux.
I have no issue with ATO knowing my transactions just wanted to put off paying CGT till I cash out.
Why do I want to go to a more traditional asset cause I'm sick of following every little thing on btc and my other investments stressing over this and that.
Just want to throw it a ETF Vanguard high growth for example and get someone else do the stressing.
Id prolly throw cash into a few ETF funds. Then just let them do there thing for years.
That counts as cashing in as soon as you exchange it on the platform for fiat to buy ETF.
One way some guy did launder money however was running a bitcoin atm business to launder his drug money.
https://www.northweststar.com.au/story/7194930/sydney-man-ja…
You might be able to do something similar cashing out in cash at a bitcoin atm or paying someone else to sell it for you but there is no guarentee ATO or police will not find out
It’s a good reason to move to ETF. But it still a capital event.
Often I move one stock to another, but still in stocks, and every time it’s a capital event and taxable if there is a gain or loss.
in the past - you could buy bitcoin - then use it for credit card purchases through a third party - amounts under 1k were not taxed,
not sure if it still applies
Umm, are you talking about GST free for international purchases, that is COMPLEETELY different to CGT
https://www.ato.gov.au/Tax-professionals/TP/Cryptocurrency--…
There is a “personal use asset” concept, but it won’t help out the OP
Why do you want to downgrade your investment from high-performance assets to average/low assets?