How to Do Your CoinJar Taxes
CoinJar has become one of the most trusted places to buy, sell, and hold cryptocurrency within Australia and other markets. Properly reporting all of your CoinJar buys, sells, and trades on your taxes however can be challenging at times. In this guide, we walk through the process of getting your CoinJar taxes done so that you can stay in the good graces of the ATO.
How Crypto Is Taxed
The Australian Tax Office (ATO) has made it clear that Capital Gains Tax (CGT) apply to cryptocurrencies such as bitcoin.
As detailed in their official guidance, you incur a capital gain or loss whenever you dispose of a cryptocurrency asset. A disposal of crypto simply refers to the act of “getting rid” of a cryptocurrency. Thus, you dispose of cryptocurrency when you sell it, trade it for another cryptocurrency, or use it for a purchase etc.
Upon disposal, your capital gain or loss associated with the transaction is simply the difference between the AUD value of the cryptocurrency at the time of the disposition minus the AUD value of the cryptocurrency at the time it was acquired.
Mark purchases Bitcoin on Binance. He pays AU$1200 for 0.1 BTC. Three months later after his Bitcoin increased in value to AU$1500, he traded it for another cryptocurrency, ETH.
In this case, John has disposed of his Bitcoin and has triggered a capital gains tax. He will owe a percentage tax on his AU$300 gain.
For a complete breakdown of how cryptocurrency taxes work in Australia, please review our guide: The Complete Australia Cryptocurrency Tax Guide.
Note: if you are a professional trader, trading stock tax treatment may apply instead of capital gains tax treatment.
CoinJar Taxes - Understanding the Problem
Because cryptocurrencies are transferable (i.e. you can send them from one wallet to another) cryptocurrency exchanges and wallet platforms typically can’t provide you with your capital gains and losses documents relating to your trades.
This is not the fault of the exchange or wallet itself, it’s simply a result of how the technology works. The exchange simply does not have the entire picture of data needed to provide this type of info because these assets were transferred into your account.
For example, if you send bitcoin from an outside wallet into your CoinJar wallet, CoinJar has no way of knowing at what cost (cost basis) you acquired that crypto for. Cost basis is essential data you need in the calculation of your capital gains and losses. Because CoinJar does not have this data, it can’t generate your gains and losses for you.
We detail this problem in more detail in our blog post: The Cryptocurrency Tax Problem.
So How Do You Get Your Necessary Tax Reports?
If your exchange can’t generate your capital gains and losses forms, then how do you do it?
In order to properly build out your necessary crypto tax forms, you need to pull together all of your cryptocurrency data that makes up your buys, sells, trades, air drops, forks, mined coins, exchanges, and swaps across all of the exchanges and platforms that you use.
In other words, you need to pull together your trading records from all of your platforms so that you can track your cost basis (how much it costed you to acquire a cryptocurrency) across platforms.
Once you have all of your historical data from all platforms, you can do the capital gain and losses calculations for each of your crypto disposals by hand. Alternatively, you can use specialized crypto tax software to do this for you.
CryptoTrader.Tax + CoinJar
To make this data aggregation process as easy as possible, CoinJar and CryptoTrader.Tax have teamed up.
CryptoTrader.Tax is a cryptocurrency tax software used by tens of thousands of crypto investors all over the world.
To generate your capital gains and losses forms, simply import your transaction history from ALL of the platforms you have used to buy, sell, trade, and earn crypto into your CryptoTrader.Tax account with the click of a button. You can then auto-generate your capital gains and losses forms based on this data.
Download Your CoinJar History File
Download your CoinJar CSV file by navigating to “Tax Settings” > “Purchase and Sales Reports” within your CoinJar account.
Import this file into CryptoTrader.Tax and generate your capital gains and losses forms.
The short video demo below demonstrates this process.
If you have any questions regarding how to report your cryptocurrency taxes, feel free to reach out to our live chat support specialists at CryptoTrader.Tax. We have been doing this for a long time, and we are happy to answer your questions for free!