Onions, crypto and tax

avatar of @galenkp
4 min read


The hardest thing to understand in the world is the income tax.

*- Albert Einstein -

For over twenty years I've used the same accountant to manage my taxation affairs including a sole-trader business, a company I own and my personal tax preparation. He's gone from an accountant (CPA) at a small firm to taking it over and he's conservative which is not a bad thing - flamboyancy could see me in breach of tax laws here that comes with penalties including jail time.

Overall, I've been happy, but dissatisfaction has crept in.

My financial year tax preparations were emailed to me a week ago for electronic signing prior to being submitted to the ATO (Australian Tax Office). I wanted clarity and sought a face to face appointment.

Here's the thing, I pay an annual fee to my accountant by prior written and signed arrangement. It's a fairly large sum of money, into the thousands, but it comes with a raft of perks and benefits and is, in itself, tax deductible - it covers all aspects of my financial affairs. He's not delivering on his end of the bargain though and today I discovered part of the reason why.

Before I write disparaging comments about my accountant, and in the name of fairness, I should say that crypto-currency law is a complete shambles in Australia. The Government change positions, (tax law), to suit themselves and with tax revenue in mind. They keep things sitting on a bed of quicksand to trap the unwary; the unwary are Australians like me who have and trade crypto-currency and, unfortunately for me, my accountant too. Having said that though, my expensive accountant gets paid to know it.

My accountant didn't look happy to see me today.

He was standoffish borderline-rude from the moment he came into the waiting room to get me. The fellow barely greeted me and his body language was negative and unwelcoming. Maybe he's just having a bad day, I thought. I proceeded with some light banter and, nothing, except the same bad attitude. When we got into his office it smelled like boiled fucken onions and was in a mess; he had three food containers strewn on his desk, one with half eaten food in it, clothes hangin on hooks all over the place, in a corporate office, and to top it off he slumped down into his chair and said, without even looking at me, what's cooking.

What's fucken cooking bro? What's cooking? Fucken boiled onions you mother fucker! What the bloody fuck! #wtbf

OK, I didn't say that, but I thought it.

Instead, I opened up with some dialogue around needing some clarification in respect of my tax return and with the crypto-currency part in particular. This was in response to a very large sum that had been assessed as a capital gain. Just to be clear here, I have not moved any crypto-assets into fiat currency since I began trading in 2017...but I have a tax bill. The government here tax transactions in exchanges (buys and sells) and if a gain is made it's deemed a capital gain and tax applies. I transferred a friend of mine $1000AUD of crypto-currency last week...and I'll pay tax on it. There's other scenarios of course, but I want to keep this simple.

So, back to my oniony-accountant.

He didn't have many answers, just cursory responses clearly quoted from the ATO website, and when I pushed him on a few matters he came up blank. This is a CPA, one who has told me he has several clients with sizable crypto-holdings, and to whom I pay a lot of money.

The meeting didn't go well but I'm pleased to say I maintained a calm demeanour throughout despite onion-boy pushing me to the limit.

As I walked out I had already made the decision to source a new accountant, and not just because mine is crypto-clueless but because I have lost confidence in him and that's not a good thing when it comes to financial matters. Transitioning my tax/business related matters over to someone new is going to be a pain in the ass, finding the right one will be worse I think though as I'll need to locate one who understand crypto-currency much better - a specialist. It's a sad state of affairs really, and something I really don't need in my life right now, but the chap left me no choice.

The tax laws around crypto-currency in Australia are draconian, unfair and scattered, meaning, not clear.

They take advantage of the fact that the world of crypto-currency is akin to the wild west at the moment and whilst there's people out there (in Australia) who might be thinking they may be able to rort the system...well, time will tell. I'm not saying they won't, but like all shortcuts they may find the price is ultimately more than they might like to pay; being someone's bitch in prison isn't my idea of fun. *

I'll not lie, this whole situation, the harsh and unfair tax law and my onionish-accountant's nutbaggery, rubbed me up the wrong way today and I'm pretty annoyed. It's all rather fucked, both things, but there's not much to do but take it, make the changes I am able to and move forward as best I can.

I wonder if you've had any experiences in respect of tax laws and capital gains made on your crypto-currency. I know a lot of people use it for living expenses in certain countries and I wonder if there's an expectation that it may catch up with them at some stage? Income tax and capital gains tax is a reality in many places, have you come across it? I don't know what the situation looks like in other countries, just like people outside Australia can't speak for what happens here, so I'm curious to know, if you want to tell.

Design and create your ideal life, don't live it by default - Tomorrow isn't promised so be humble and kind

I took the image in this post myself