Guide to Navigating and Understanding Your Tax Report (Australia)

Introduction

This guide explains how to navigate and understand your tax report. It outlines the structure of the report, key settings, and how different transaction types are classified and taxed.

Section 1: Settings

Before generating your report, you can configure multiple settings that directly affect the calculation results.

Accounting Method

CoinTracking provides several accounting methods:

• FIFO (First-In-First-Out): The earliest acquired assets are treated as sold first

• LIFO (Last-In-First-Out): The most recently acquired assets are treated as sold first

• HIFO (Highest-In-First-Out): The assets with the highest acquisition cost are sold first

Each method has different tax implications.
FIFO is typically used in Australia, but the correct method depends on your individual situation and applicable tax rules.

Automatic Depot Separation

• Automatically assigns deposits and withdrawals to specific exchanges or wallets

• Without activation: all wallets/exchanges are treated as one combined portfolio

• With activation: each wallet/exchange is treated as a separate portfolio

This enables more precise cost tracking and evaluation.

Tax Treatment of Liquidity Pool / Mining Transactions

• Transactions such as “Provide Liquidity” and “Return LP Tokens” can be treated as disposals

• This triggers gain/loss calculations in the report

Group by Day

• Groups all purchases and/or sales by day

• Useful if timestamps are inconsistent (e.g. timezone differences)

FIAT Warnings

• Displays a warning when assets are purchased in a FIAT currency not configured in the account

Foreign FIAT PnL

• Enabled: Foreign FIAT gains/losses are treated like crypto gains/losses

• Disabled: Only AUD is considered; foreign FIAT gains/losses are ignored

Conversion

• All transactions are converted into your FIAT currency (AUD) at the time of the transaction

• Required for gain and tax calculation

• As this is a bit more complicated, we have a separate FAQ for it Conversion Method

Foreign Assets

• Provides an overview of crypto assets held on foreign exchanges

• Identifies holdings exceeding AUD 50,000 at any point during the year

Tax Treatment of Unused Loans

• Default: Loans that are not used and later returned are treated as tax-neutral (zero proceeds)

• If disabled: gains/losses are calculated for these transactions

Sophisticated Trader

• Investors and sophisticated traders are treated differently

• Investors: eligible for 50% CGT discount on long-term gains

• Sophisticated traders: no discount applies

Derivatives, Margin and Futures Assignment

• Allows classification of these transactions as:

  • Capital gains, or Other income

Additional Settings

For each setting, an “i” infobox provides further explanations directly in the interface.

Section 2: Overview

The report categorizes transactions according to Australian tax rules.

Capital Gains – Investor

Short-Term Capital Gains

• Applies to assets held less than 12 months

• Includes:

  • Selling crypto for fiat

  • Crypto-to-crypto trades

  • Gifts

  • Liquidity pool transactions

Long-Term Capital Gains

• Applies to assets held more than 12 months

• Eligible for 50% CGT discount (investors only)

• Includes the same transaction types as short-term gains

Important:
 The ATO distinguishes between investors and sophisticated traders.
 The discount only applies to investors.

Report Sections

The report is structured into:

1. Short-term capital gains (crypto & NFTs)

2. Long-term capital gains (crypto & NFTs)

3. Other income

4. Non-taxable income

5. Other payments

Taxable Transactions

Transactions typically triggering capital gains:

• Trade

• Spend

• Fees paid in crypto

• Remove liquidity

• Provide liquidity

Example

• Buy 1 BTC for 10,000 AUD

• Sell for 20,000 AUD
   → Gain: 10,000 AUD (Section 1.1. Realized capital gains/losses from cryptocurrency trading)

Derivatives, Margin and Futures

• Classified as other income (depending on settings)

Includes:

• Margin gain / loss

• Derivatives / futures gain / loss

• Fees and settlement fees

Example

• Profit: 1,000 AUD

• Loss: 500 AUD
   → Net gain: 500 AUD (Section 3.1. Other income from derivatives, margin and future trading)

Other Income

Income is taxed when:

• You have control over the asset

• The value can be measured in AUD

Includes:

• Income

• Reward / Bonus

• Staking

• Mining

• Airdrop

• Masternode

• Dividends income

• Lending income

• Interest income

• LP Rewards

• Other income

Example

• Staking reward: 0.5 BTC (20,000 AUD)

• Airdrop: 100 AVAX (100 AUD)

→ Taxed as income (up to 45%), reported under Section 3.2. Other Income

Non-Taxable Income

Includes:

• Income (non-taxable)

• Airdrops (non-taxable)

These must still be reported for completeness and is documented under section 4. Non-taxable income from cryptocurrency and NFT trading

Other Cryptocurrency and NFT Payments

Reported separately due to varying tax treatment:

• Incoming gifts and donations

• Outgoing donations

• Lost or stolen assets

• Commercial mining

• Minting

Section 3: Transaction List

The Transaction List shows all transactions in detail:

Summary

• Settings significantly influence tax calculations and must be configured correctly

• The report separates transactions into capital gains, income, and non-taxable categories

• Australia applies:

  • Capital Gains Tax with a 50% discount for long-term holdings (investors)

  • Income tax (up to 45%) for crypto income

• Proper classification of transactions is essential for accurate reporting

Disclaimer

This guide is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws may change. Consult a qualified tax professional for personalized advice.