TAX ESSENTIALS FOR CRYPTO INVESTORS • STEP 2 OF 4
See It: Jake's Crypto Tax Journey
Experience is a hard teacher because she gives the test first, the lesson afterward.
— Vernon Law
Follow Jake's crypto journey and discover how timing, record keeping, and understanding CGT events impact your tax bill.
Your Learning Journey
Your Learning Journey
This Step Takes: 20 minutes
Follow Jake's journey through real crypto scenarios, see the tax implications of each choice, and learn what works.
What You'll Learn
See how the 12-month CGT discount saves money, why staking rewards are income not CGT, and how poor record keeping leads to penalties.
Real scenarios showing CGT timing, staking income, and record keeping impact.
January 2023: Jake buys $10,000 of Bitcoin at $30,000 per coin. By November 2023, it's worth $25,000. Bitcoin is pumping, but Jake needs $15,000 for a new car. He's held for 10 months.
Key Lessons from Jake's Journey
Here's what Jake learned (and what you should remember).
Wait for 12 Months
Staking = Income, Not CGT
Track Every Transaction
💡 The ATO Has Blockchain Data
Australian exchanges report to the ATO. On-chain transactions are public. Don't assume crypto is invisible—keep honest records and report everything.
What Jake Did Right (Optimal Path)
If Jake made all the right choices, here's what his tax outcome looked like.
Waited 12+ Months
Saved $406
By holding Bitcoin for 12 months + 1 day, Jake unlocked the 50% CGT discount. Taxable gain cut from $7,500 to $3,750.
Reported Staking Income
$81 Tax
Jake reported his $250 staking reward as ordinary income. Tax: $81 at his 32.5% rate. Avoided penalties!
Airdrop as Income
$500
Jake received a $500 airdrop and reported it as income at market value. His cost base is now $500 for future CGT.
Used Tax Software
No Stress
Jake used Koinly to auto-track transactions. Perfect records, accurate tax report, and ready for growth!
Total Tax: $1,300
No penalties. No stress. Perfect records for future audits.
Compare this to the "poor" path: $4,425 in tax + penalties. Jake saved $3,125 by doing it right!
Tax-101 for Crypto - See It: Complete
- Waiting 12+ months for the CGT discount can save hundreds or thousands in tax
- Staking rewards and airdrops are ordinary income when received, not CGT
- Crypto tax software (Koinly, CoinTracking) automates tracking and prevents costly mistakes
Homework
Which of Jake's mistakes have you made (or almost made)? What will you do differently?
If you have crypto holdings, sign up for a crypto tax software trial (Koinly, CryptoTaxCalculator, or CoinTracking) and import your transactions.
What's Next?
20 minutes