Australian CGT Formulas

Technical formulas and calculation logic for Australian CGT as implemented in PrivateACB.

Cost Base per Parcel

Each acquisition creates a parcel (lot) with a cost base calculated as:

cost_base = purchase_price × quantity + fees

Example: Buy 2.0 ETH at A$3,000 each with a A$15 exchange fee:

cost_base = (A$3,000 × 2.0) + A$15 = A$6,015
cost_base_per_unit = A$6,015 / 2.0 = A$3,007.50

The ATO recognises 5 cost base elements (Section 110-25, ITAA 1997):

1. Money paid — purchase price and acquisition fees
2. Incidental costs — brokerage, exchange fees, legal costs
3. Costs of ownership — interest on money borrowed to acquire the asset (not typical for crypto)
4. Capital costs — costs to increase or preserve the asset’s value
5. Costs related to CGT event — disposal fees

For most crypto transactions, elements 1 and 2 (purchase price + exchange fees) are the relevant items.

Disposal Gain or Loss

When you dispose of crypto, the gain or loss per parcel is:

capital_gain = proceeds - cost_base
capital_loss = cost_base - proceeds   (if proceeds < cost_base)

Where:

• proceeds = sale price × quantity disposed from this parcel, minus selling fees
• cost_base = cost base per unit of this parcel × quantity disposed from this parcel

Multi-Parcel Disposal (FIFO Example)

When a disposal uses multiple parcels:

Parcel	Qty Used	Cost Base	Proceeds	Gain/Loss
Parcel 1 (oldest)	1.0	A$50,000	A$65,000	+A$15,000
Parcel 2 (next)	0.2	A$12,000	A$13,000	+A$1,000
Total	1.2	A$62,000	A$78,000	+A$16,000

Each parcel’s gain/loss is calculated independently, then aggregated.

CGT Discount Eligibility

A capital gain from a parcel is eligible for the 50% CGT discount if all of these conditions are met:

1. The taxpayer is an Australian individual (not a company, super fund, or trust)
2. The parcel was held for more than 12 calendar months
3. The disposal resulted in a capital gain (not a loss — losses are never discounted)

The 12 Calendar Month Check

eligible = acquisition_date + 12_calendar_months < disposal_date

This uses calendar months, not a fixed day count:

Acquisition Date	Disposal Date	Months Held	Eligible?
15 Jan 2024	15 Jan 2025	Exactly 12	No (must exceed 12)
15 Jan 2024	16 Jan 2025	12 months + 1 day	Yes
29 Feb 2024	1 Mar 2025	12 months + 1 day	Yes
1 Jul 2024	30 Jun 2025	11 months + 30 days	No
1 Jul 2024	1 Jul 2025	Exactly 12	No
1 Jul 2024	2 Jul 2025	12 months + 1 day	Yes

Note

This differs from the US “long-term” classification which uses a simple >365 days check. The calendar-month approach means leap years and month lengths can produce different results.

Net Capital Gain: The Q18 Netting Algorithm

The ATO’s Individual Tax Return Question 18 uses a specific netting sequence. PrivateACB implements this exactly:

Step-by-Step

Step 1: Classify all gains
  non_discount_gains = sum of gains from parcels held ≤12 months
  discount_eligible_gains = sum of gains from parcels held >12 months
  total_gains = non_discount_gains + discount_eligible_gains

Step 2: Sum all losses
  total_losses = sum of all capital losses (absolute value)

Step 3: Apply losses to non-discount gains first
  remaining_non_discount = max(0, non_discount_gains - total_losses)
  losses_remaining = max(0, total_losses - non_discount_gains)

Step 4: Apply remaining losses to discount gains
  remaining_discount = max(0, discount_eligible_gains - losses_remaining)

Step 5: Apply 50% discount
  discounted_amount = remaining_discount × 50%

Step 6: Net capital gain
  net_capital_gain = remaining_non_discount + discounted_amount

Worked Example

Disposal	Gain/Loss	Discount Eligible?
BTC sale	+A$40,000	Yes (held 16 months)
ETH sale (Lot 1)	+A$7,500	Yes (held 19 months)
ETH sale (Lot 2)	-A$2,500	N/A (loss)
SOL sale	+A$10,000	No (held exactly 12 months)
ADA sale	-A$200	N/A (loss)

Step 1: Non-discount gains = A$10,000 (SOL). Discount-eligible gains = A$47,500 (BTC + ETH Lot 1).

Step 2: Total losses = A$2,700 (ETH Lot 2 + ADA).

Step 3: Apply A$2,700 losses to non-discount gains first: A$10,000 - A$2,700 = A$7,300 remaining non-discount. Losses remaining: A$0.

Step 4: No remaining losses to apply to discount gains: A$47,500 remaining discount-eligible.

Step 5: Discount: A$47,500 x 50% = A$23,750.

Step 6: Net capital gain = A$7,300 + A$23,750 = A$31,050

This is the amount that goes on Question 18 of your Individual Tax Return.

Comparison: Canada vs US vs Australia

Formula	Canada	United States	Australia
Cost basis	Pooled average (ACB)	Per-lot cost	Per-parcel cost
Gain calculation	Proceeds - ACB per unit	Proceeds - lot cost	Proceeds - parcel cost
Loss denial	Superficial loss (30-day)	Wash sale (30-day, optional)	None (mechanical)
Holding benefit	None	ST/LT rates (>365 days)	50% discount (>12 cal. months)
Inclusion rate	50% of net gain	100% (lower LT rate)	100% (50% discount first)
Loss netting	Losses offset gains freely	ST/LT netted separately	Losses to non-discount first
Tax year	Jan 1 – Dec 31	Jan 1 – Dec 31	Jul 1 – Jun 30

Why the Same Trade Produces Different Results

The same BTC trade history can produce different tax outcomes in each jurisdiction:

• Canada pools all purchases, so the cost basis is a weighted average — individual lot costs don’t matter
• US uses FIFO by default, may have wash sale adjustments, and classifies gains as short-term or long-term for different tax rates
• Australia uses FIFO by default, has no loss denial, and applies the 50% CGT discount (reducing the gain itself, not changing the rate)