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Crypto capital gains are one of four important areas of focus for the Australian Taxation Office (ATO) in 2022.

The price difference between when an asset was purchased and when it was sold is referred to as a capital gain or loss. The amount owing to the ATO varies depending on income and length of ownership, although in general, the rate is lower for assets kept for more than a year.

The Australian Taxation Office (ATO), which has issued numerous warnings to crypto investors in recent years, has now specifically listed nonfungible tokens (NFTs) as an asset type that will be reviewed for proper tax reporting.

According to a Monday release, the ATO will examine record-keeping, work-related expenses, and rental property income/deductions in addition to capital gains from crypto, property, and shares.

With most crypto assets seeing significant market drops in 2022, the ATO stated that every sold crypto asset, including NFTs, must have a calculated capital gain or loss recorded with it, and that it will be "taking firm action" against taxpayers who attempt to falsify their records.

Assistant commissioner Tim Loh of the ATO also claimed that the taxing authority already has a good notion of people's investing activities, but urged everyone to keep meticulous records to avoid penalties, saying:

"We don't pre-fill all of that information for you because we get and match a lot of information on rental income, foreign-sourced income, and capital gains events involving shares, crypto assets, or property."

The ATO has witnessed a considerable increase in local crypto investors who may not be aware of the proper reporting processes, according to Loh:

"We expect to see more capital gains or capital losses declared in tax returns this year because cryptocurrency is a popular asset." Remember that your bitcoin losses cannot be credited against your salary or compensation."

"We know that many Australians are purchasing, selling, or exchanging digital currency and assets through our data collecting methods, so it's critical that individuals understand what this means for their tax duties," he added.

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