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Crypto is volatile, so losses are common. The upside at tax time is that a crypto capital loss can offset a capital gain on shares or other investments, because the ATO pools capital gains and losses across all your CGT assets.
How it works
- Net your capital gains and losses for the year. Crypto losses and share gains go into the same calculation. There's no requirement to match like with like the way US short-term and long-term rules work.
- Apply losses to gains. Tip: apply losses first against gains that don't get the 50% CGT discount, then against discounted gains, to keep the discount working hardest for you.
- Carry forward the excess. A net capital loss carries forward indefinitely to offset future capital gains.
- Not against income. Net capital losses can't reduce salary or wages.
Example
You have AUD 5,000 of capital gains on shares and AUD 8,000 of capital losses on crypto. The AUD 5,000 share gain is wiped out by AUD 5,000 of crypto losses. The remaining AUD 3,000 loss carries forward to future years; it cannot be deducted from your salary.
Tax-loss selling, and the wash-sale trap
Selling underperforming assets before 30 June to realise losses and offset gains is a legitimate strategy in Australia, but there's a hard limit. The ATO's wash-sale ruling (TR 2008/1) targets arrangements where you dispose of an asset at a loss and reacquire the same or substantially the same asset, where the dominant purpose is the tax benefit. Unlike the US 30-day rule, the ATO sets no fixed window; it looks at intent and the surrounding facts. If it concludes you've done a wash sale, the capital loss can be disallowed (and Part IVA anti-avoidance can apply). Selling and immediately rebuying the same token to manufacture a loss is exactly what this targets.
Tracking gains and losses
Accuracy matters because the ATO data-matches exchange records against your return. Summ (formerly Crypto Tax Calculator) categorises trades, calculates AUD gains and losses, and produces an ATO-ready report.
Capital gains basics
A capital gain arises when you dispose of an asset for more than its cost base; a capital loss when you dispose for less. Individuals who hold a CGT asset for more than 12 months generally get the 50% CGT discount on the gain. Crypto disposals that trigger CGT include selling for AUD, swapping crypto for crypto, spending crypto, and gifting it.
This article is general information, not tax advice.
The information provided on this website is general in nature and is not tax, accounting or legal advice. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information, you should consider the appropriateness of the information having regard to your own objectives, financial situation and needs and seek professional advice. Summ (formerly Crypto Tax Calculator) disclaims all and any guarantees, undertakings and warranties, expressed or implied, and is not liable for any loss or damage whatsoever (including human or computer error, negligent or otherwise, or incidental or Consequential Loss or damage) arising out of, or in connection with, any use or reliance on the information or advice in this website. The user must accept sole responsibility associated with the use of the material on this site, irrespective of the purpose for which such use or results are applied. The information in this website is no substitute for specialist advice.
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