TAX MASTERY • STEP 3
CGT Calculator: Sell vs Borrow
The question isn't whether to sell, but when, and what it costs.
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Compare the tax cost of selling crypto vs borrowing against your holdings. Understand the real cost of accessing liquidity.
Your Tax Learning Journey
Your Tax Learning Journey
This Page Takes: 15 minutes
Why This Matters
When you need cash, most people sell crypto and pay capital gains tax. But there's often a better way: borrowing against your holdings. This calculator shows the true cost of each option. For many investors, the cost difference is tens of thousands of dollars.
Sell vs borrow: the difference can be tens of thousands of dollars.
Calculate Your Strategy
Enter your crypto holdings details and see which strategy saves you the most money.
Investment Details
Used to determine 12-month CGT discount eligibility
Total portfolio value today
Your prediction after 12 months (e.g., 50% market correction)
Used to determine your marginal tax rate
How much liquidity do you need?
Typical range: 8-15% for crypto-backed loans
Results & Comparison
Enter your details and click "Calculate Scenarios" to see results
When Borrowing Makes Sense
Good Reasons to Borrow
- You expect the asset to appreciate significantly over the loan period
- You've held the asset for less than 12 months (avoiding short-term CGT rates)
- You need liquidity but don't want to trigger a taxable event
- Your LTV ratio is conservative (below 30%) to minimize liquidation risk
- You can use borrowed funds for income-producing investments (tax deduction)
When Selling Is Better
- You expect a major market correction (40%+ drop)
- You've already held for 12+ months (CGT discount applies)
- The interest cost exceeds the CGT cost
- You want certainty and no liquidation risk
- You're rebalancing out of crypto entirely
The 12-Month Rule
Understanding the Risks
Liquidation Risk
The biggest risk of borrowing against crypto is liquidation. If the price of your collateral drops below a certain threshold (typically 70-85% LTV), the lender will automatically sell your holdings to repay the loan.
How to Manage Liquidation Risk:
- Keep your LTV ratio low (20-30% is conservative)
- Maintain reserves to add collateral if needed
- Set price alerts at key liquidation thresholds
- Choose lenders with margin call warnings (not automatic liquidation)
Regulatory Risk
Most crypto-backed loan providers are international and may not be licensed by ASIC (Australian Securities and Investments Commission).
Due Diligence Checklist:
- Verify ASIC registration and Australian Credit Licence
- Review loan terms, LTV ratios, and liquidation policies
- Understand interest rates (fixed vs variable)
- Check for margin call procedures and notice periods
- Consult with a crypto-savvy tax professional
CGT Calculator - Try It: Complete
You now have a practical tool to compare sell vs borrow strategies for your crypto holdings. You understand when each strategy makes sense and how to manage the risks of borrowing.
Compare sell vs borrow strategies. Understand risks and when each makes sense.
This calculator shows you the real cost of accessing liquidity from your crypto portfolio. Use it before making any major liquidation or borrowing decisions.
Use before any major liquidation or borrowing decisions.
Your Tax Learning Journey
Your Action Plan
- Bookmark this calculator for future use when you need liquidity
- Review your current holdings. Are any close to the 12-month CGT discount mark?
- Research ASIC-licensed crypto lending providers in Australia
What's Next?
DEEP DIVE
Ask the AI Learning Assistant
Now that you know the numbers, explore your specific tax structure options with the AI Learning Assistant. Ask about trusts, companies, and how to structure your portfolio for maximum efficiency.
Explore your tax structure options with the AI Learning Assistant.
Ask the AI Learning Assistant →