Q: I’m interested in investing in cryptocurrency in my SMSF. Must the fund specifically state in its trust deed that this is allowed? Nick
A key aspect of crypto investing is understanding how important it is to keep accurate records of transactions and holdings.Doing this, he says, will highlight that trustees who wish to invest in cryptocurrencies have given themselves an express power to do so because they feel this is warranted. They are an asset class where investment returns come from making capital profits from buying and selling coins and tokens.
With crypto investing you also need to be aware how they are taxed when they are sold. This includes knowing that any profits are treated as an asset on which you must pay capital gains.A: If you as a member of an SMSF own a crypto investment personally, which many investors in crypto do, you will not be permitted to transfer this as a contribution or a sale to the fund. Nor will your fund be able to buy it from you.
The reason for this prohibition is that section 66 of the Superannuation Industry Act prevents a super fund from acquiring assets from related parties. A: Bitcoin or cryptocurrency mining is the activity of creating new crypto coins or tokens which occurs on the internet between sophisticated computers that run complex programs designed for this purpose.Being involved in crypto mining is different from buying and selling crypto coins and tokens as investments in the hope of making a capital profit on these transactions.
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