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if you have 10k to spare treat it as high risk, 2.5k in a year isnt going to be life changing but for 10k meh roll the dice
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Question of the Day: How do you usually spend your Easter weekend?
Crypto earnings & Capital Gains Tax
- Thread starter saor
- Start date
Pho3nix
The Legend
With a 100k; 25k is nothing to sneeze at for nothing basically.
Let me see how a smaller amount plays out
just remember herein lies the risk.
I can toss R10k away R100k is another story.
This is where ppl start pulling out credit and home loans do this and then things go "tits up"
Helps generate tax reports (Think you need to pay to download the report) but can see the values for free. Also indiactes it as capitals gains so might be worthwhile if you have bought and sold a lot on different wallets and need a sumarised report.
its not good if being shown as capital gains - unless that is in fact correct.
You literally enter into non CGT world if you do any coin for coin or cash out on an ongoing basis even a few times a year.
This is where SARS is nailing ppl. You want to do CGT you better have your facts straight otherwise its smooth sailing. I have had zero issues for years including the last year - but I mark mine as income tax which it is.
I always plan for Income Tax and Hope for Capital Gains Tax. If you biught Bitcoin held for 1 year and sold how can they know your intensions and claim its income tax ?
Trading is 100% income tax just difficult to establish what intension is and what clasifies as Income Tax vs CGT if you have limited buys and sells over 1-3 years?
This is where you need to be able to build a solid case and be able to defend it.
For example you bought btc 1 jan 2021 traded that for eth then doge then a year later back to btc then a year later back to doge etc The argument here is going to be very difficult for CGT.
If however you bought 1 jan 2021 and DCAd every month for the last 2-3 years and now decide to sell, there is more of an argument for CGT. You need to view this from a long term perspective before you start dabbling in crypto. You almost need to determine am I in this for quick profits where you will 4x in one month cash out (income tax) or attempt CGT and HODL for the longer term.
There is the CGT guide on SARS so you can work through that with all the relevant case law but if you have anything of significant value a few mil plus ensure you have a well versed tax consultant to assist
Dont over complicate things maybe pop your scenario here and we can comment.
1 year likely income tax 2 some argument for CGT from year 3 there is a strong argument for CGT but not guaranteed.
and let me be clear SARS has more than sufficient case law to deal with crypto - its not something special or new.
I recently signed up with koinly and imported all the exchanges and wallets I use. It gives a breakdown for the tax year Income, expenses, Capital gains. Is this sufficient to put on my return? What codes would these go under, and if I have a net loss would I just put it under crypto loss and leave profit blank? To generate a full tax report costs 200$ which is insane, due to using defi and staking the amount of transactions become 1000's even though I'm not really trading, so I don't want to pay 200$ when I'm barely even making profit. Anybody use koinly or know where to fill this stuff, I've never declared crypto on my returns and never withdrawn from luno to my bank.
everything you just described puts you into the realm of income tax NOT CGT.... its highly unlikely that your activity would be seen as anything but that. if this is serious amounts get a professional
I seriously doubt you have any CGT... If you do any sort of trading on a fairly frequent basis its unlikely please note this does not mean cash out it means anything BTC to zar BTC to Eth to doge etc...
If you select CGT and its not be ready for an audit... You have to be comfortable to defend a CGT position.
I know my tax ish and have been doing this for many many many years
Im happy to mark it as income..the problem is knowing how much to declare, koinly is so innacurate when u start doing defi and tags everything incorrectly. Probably best to just get a tax advisor, tired of worrying about tax for such small amounts. Friend of mine withdrew from Luno and never declared it, he got a letter from Sars to pay. Seems easier just not declare and wait for SARS to ask for their share, than trying to calculate this.
I am wondering. I have bought from Luno in order to make payments for other things, nothing dodgy though.
Looking at the statement/stats I am running at a loss. Monitoring my "savings" I seem to be losing more than gaining from the funds left there.
Will I be taxed on my deposits and withdrawals even though I have not gained anything?
Looking at the statement/stats I am running at a loss. Monitoring my "savings" I seem to be losing more than gaining from the funds left there.
Will I be taxed on my deposits and withdrawals even though I have not gained anything?
You are taxed on any taxable event. Only if there is a gain tho or profit.
If you buy anything with crypto it's a taxeble event doesn't matter if it's another coin or a car or Netflix subscription.
If you made a loss no tax is payable but you should still declare the loss...