Looking for a tax accountant who is well versed in cryptocurrency and NFTs

I currently have a family trust (with a corporate trustee) for our businesses. We initially wanted to invest in properties, ETFs or shares through this trust and this idea was considered okay by a tax accountant. However I went to do more research in this space and a secondary trust is recommended to hold passive investments (ETF, shares). In addition, I recently invested in coins and NFTS (purchasing either cash or coins) in my personal name and I start to worry about the complexity in the tax returns. Hence I am seeking a change of accountant who can assist me and looking for a long term relationship as I start to explore more into this investment journey. Thanks in advance!

 

@Paul@PFI deals in this space

 

+1 for @Paul@PFI - long-time contributor with excellent and detailed knowledge to share.

 

I have no real knowledge of NFT or crypto.

And I am not particularly interested in learning about it. That might change but I am not yet convinced about it.

 

My accountant asked me to use Koinly. It synced all of my wallets/exchanges and summarised all transactions and crypto gains in a report. I would definitely recommend using it. You do need to a pay a fee to generate reports (I think $49) however they were so helpful, seemed accurate and saved my so much time

 

i think koinly is excellent. The ATO has said in presentations before that koinly are well versed in the Australian tax system and their reports cater for this. I also highly recommend it to clients.

 

I suspect the ATO use Koinly too.....They seem to have a exceptional ability to know the proits and losses on unreported trades. It would be great if they could provide this as prefill data in a way that give taxpayers confidence. That part I dont know.

Crypto is just an asset interest. It can produce CGT or revenue events and tax advisers do need to understand this so they can advise clients. Not understanding or not wanting to is like saying "I dont beleive in a SMSF / Trust so I dont do them". My personal views on crypto are irrelevant to my tax advice. I have also advised owners of brothels, illegal gambling and a thief. I dont have to agree with their choices to give advice.

Many taxpayers seek out a tax adviser thinking cryto is something new and special and uber complex. It actually isnt. It can be different and complex I will admit. But if you follow some basic rules which koinly also uses its not too hard..

1. If you sell a coin interest its a sale even if its exchanged for something different.
2. If its exchanged for something different then its a sale and buy. There is not such thing as a "free" interest. Some trades and arragemnet may need apportionment to ive each a cost.
3. Exchange rates also affect most transcatiosn depending on the exchange domicile currency (USD ?)
4. You dont need to convert anything to AUD or repatrriate a single thing to still have a tax issue
5. renting your coin produces income. Its assessable
6. It can be easier to use a average exchange rate rather than specific rates. Koinly does specific which REAALY helps.

Generally tax advisers need the following info:
- Total gains for all sales, where coin was owned 12mth+
- Total gains for all sales, where coing was owned < 12mth
- Total losses on sales
- Any income from "renting" etc
- Any costs incurred. (Fees charged as part of sale / buy are a element of the proceeds used in costs and prices and are not deductible)

If a taxpayer trades frequently and has sufficient busienss like process then the crypto may also be trading stock" and a slight variation on this is used. Then up to FIVE numbers are needed

1. Total AUD value of all sales
2. Value (based on cost *) of coin held on last day of the prior financial year
3. Value AUD of all purchases in year whether sold or notr
4. Value (based on cost*) of coin held on last day of the financial year
5. Costs incurred

* This is optional and you can use market value however if value has risen, after purchase it will overstate profit subject to tax so you are paying tax on unreailised profit. Note the opening stock value method must be same as the prior tax return and cannot change.

TIP : DONT provide a huge spreadsheet to any tax adviser and ask them to work it out. They wont. I wont. My fee estimate will reflect that.

 

Thanks Mike!

 

We use Koinly as well. However we realised that the transactions are off and we have to do correct the data, that is what my partner has said.

 

??? Is that because of currency exchange rates ?

 

id contact them if something isnt right. their support is excellent.

 

Koinly can miss quite a few transactions, that have to be done manually. For example:
-Binance API doesn't show the cost base of coins bought with credit card/fiat, has to be added manually to avoid overpaying tax
-Solana blockchain transactions, it can't read them yet
-Some exchange APIs don't work properly or are incomplete
-Some need manual imports and coding

It's not a hands-off process, it still needs manual review and to fill the gaps. If something starts with zero cost base because it can't find the buy transaction, that's going to cost extra tax.. so they recommend to get ALL wallets/exchanges/blockchains in there.