Personal Use Category

Everyday crypto transactions used to buy goods and/or services

Patrick McGimpsey avatar
Written by Patrick McGimpsey
Updated over a week ago

Do you use crypto for everyday transactions that shouldn’t be considered for CGT in your local Tax Jurisdiction?

The CryptoTaxCalculator platform can handle this situation with our ‘Personal Use’ category. It is extremely important to discuss the use of the category with your accountant, as there are only a few specific scenarios when this category can be used in applicable tax jurisdictions.

For Australian crypto users, the ATO has this to say about personal use assets:

A crypto asset is a personal use asset if you keep or use it mainly for personal use. The most common situation of personal use of crypto assets is to buy items for personal use or consumption.”

For US crypto users, the IRS states that capital gains tax will still apply when exchanging virtual currencies for other assets:

“If you exchange virtual currency held as a capital asset for other property, including for goods or for another virtual currency, you will recognize a capital gain or loss.”

Similarly, the HMRC recognizes the use of cryptocurrency to purchase items as a disposal event for crypto users in the UK:

“You might need to pay Capital Gains Tax when you:

  • sell your tokens

  • exchange your tokens for a different type of crypto asset

  • use your tokens to pay for goods or services

  • give away your tokens to another person (unless it’s a gift to your spouse or civil partner)”

It is always best to discuss this with an accountant if you are unsure.

Personal Use Category

If you have used crypto to purchase an item and you have confirmed that the transaction can be deemed ‘Personal Use’ (and thus non-taxable), then you can categorize it using the category drop-down:

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