The ATO has issued updated information on claiming Cryptocurrency losses and gains in your tax returns. The first thing that needs to understand is that losses and gains from crypto are solely stated in your tax return when you get rid of it, you sell it, turn it into fiat currency, substitute it for another type of asset, and purchase something with it, etc. You can’t identify market fluctuations or claim a loss because of changed crypto assets’ value until the loss is crystallised or realised.
From the disposal of Cryptocurrency, gains and losses should be stated in your tax return in the year when the disposal happened. When you disposed of it, you made a loss on the cryptocurrency, you can offset the loss against capital gains you might have (unless the crypto is considered a personal use asset). However, you can neutralise capital losses against capital gains. Unfortunately, you can’t offset these losses opposing to other types of income like wages and salary. If you don’t contain any capital gains to offset, you can have the losses and carry them forward for another future year when you can utilise them.
If you made money from crypto, such as airdrops or staking rewards, then these also must be reported in your tax return. Keep one thing in your mind to maintain your crypto transaction records. The ATO has complex data matching programs and the major area to consider is cryptocurrency reporting.