If you made capital gains and capital losses on crypto in the same Australian income year, the losses don't just vanish into one total. You get to decide which gains they reduce. Because only some gains qualify for the 50% CGT discount, that decision can move your net capital gain by thousands of dollars.
This post walks through how it works, using a worked example from Coinfig's calculation engine.
Two kinds of capital gain
Division 115 of the Income Tax Assessment Act 1997 lets an Australian resident individual halve a capital gain on an asset they acquired at least 12 months before selling it (section 115-25). The count leaves out both the day you bought and the day you sold, so crypto bought on 1 July 2024 first qualifies on a sale on 2 July 2025. A gain that passes this test is called a discount capital gain. A gain on crypto you held for 12 months or less gets no discount and counts in full.
Not everyone gets half. Companies can't use the discount at all (section 115-10), complying super funds get one third, and foreign and temporary residents get a reduced discount or none. The ATO's CGT discount page sets out each case. This post sticks to Australian resident individuals who hold crypto as an investment.
Two rules about losses
The first rule isn't optional. Capital losses come off your capital gains before the discount is applied. Section 102-5 sets out the calculation in that order, and the ATO's CGT discount page says the same. Halving your gains first and then subtracting losses can give a lower figure, and it isn't allowed.
The second rule gives you a choice. You can pick which capital gains your losses reduce. The ATO's How to calculate your CGT page suggests subtracting losses from gains that don't qualify for the discount first, and says this gives the best result.
The reason is simple arithmetic. A dollar of loss set against a non-discount gain removes a whole dollar from your net capital gain. Set against a discount gain, it removes only fifty cents, because that dollar was going to be halved anyway.
A worked example
Alice is an Australian resident who holds bitcoin as an investment. She uses FIFO (first in, first out), so her earliest coins count as sold first.
- On 12 August 2024 she buys 1 BTC for A$95,000 and pays a A$285 fee.
- On 3 February 2026 she buys 0.5 BTC for A$62,000 and pays a A$186 fee.
- On 20 March 2026 she sells 1.2 BTC for A$186,000 and pays a A$558 fee.
Coinfig's engine matches the sale against two parcels. A parcel is a batch of crypto bought at one time, with its own cost base (what you paid for it plus costs such as exchange fees).
| What was sold | Held for | Capital gain | Discount? |
|---|---|---|---|
| 1.0 BTC bought 12 August 2024 | More than 12 months | A$59,250.00 | Yes |
| 0.2 BTC bought 3 February 2026 | 45 days | A$6,032.60 | No |
| Total for 2025-26 | A$65,282.60 |
With no capital losses, the engine's Division 115 worksheet takes 50% off the discountable A$59,250.00, which is a discount of A$29,625.00, and arrives at a net capital gain of A$35,657.60.
Now add some losses. Suppose Alice also sold other crypto during 2025-26 for less than it cost her, and those sales produced A$15,300.00 of capital losses. That loss figure is a hypothetical added for this post, and the two results below are worked by hand from the engine's gains so you can follow every step.
Losses against the non-discount gain first
This is the order Coinfig's worksheet uses.
| Step | Amount |
|---|---|
| Losses used against the non-discount gain | A$6,032.60 |
| Losses left over (A$15,300.00 minus A$6,032.60) | A$9,267.40 |
| Discount gain after losses (A$59,250.00 minus A$9,267.40) | A$49,982.60 |
| Less the 50% CGT discount | A$24,991.30 |
| Net capital gain | A$24,991.30 |
Losses against the discount gain first
| Step | Amount |
|---|---|
| Discount gain after losses (A$59,250.00 minus A$15,300.00) | A$43,950.00 |
| Less the 50% CGT discount | A$21,975.00 |
| Non-discount gain, left untouched | A$6,032.60 |
| Net capital gain (A$21,975.00 plus A$6,032.60) | A$28,007.60 |
Same trades, same losses, and the second order produces a net capital gain A$3,016.30 higher. That difference is exactly half of the A$6,032.60 non-discount gain. In the second order, A$6,032.60 of losses was spent where each dollar was only worth fifty cents.
Both orders are allowed. The first one gives the lower figure here, which is why the ATO points people towards it.
A net capital gain isn't the tax you owe. It's added to your other assessable income and taxed at your marginal rates, so what it costs you depends on the rest of your return.
When the order makes no difference
If every gain for the year is a discount gain, or none of them are, there's nothing to choose. And if your losses are bigger than all your gains, every gain is wiped out whichever way you go. What's left over becomes a net capital loss, which you can carry forward to reduce capital gains in later years (ATO: using capital losses). Capital losses can't be deducted from your salary or other income.
What Coinfig's worksheet shows you
For an Australian individual whose crypto is on capital account, Coinfig's tax report includes a CGT Discount Worksheet (Division 115). It lists your gains held over 12 months and your gains held 12 months or less, this year's capital losses, how much of those losses went against each kind of gain, the 50% discount and the resulting net capital gain. A note underneath states the order the losses were applied in and that a different order would give a different figure, so the working is on the page rather than hidden in one number.
A few limits are worth knowing before you rely on it.
- The worksheet uses capital losses from the same income year only. Net capital losses carried forward from earlier years also come off before the discount, so take those into account separately.
- If this year's losses are larger than this year's gains, the worksheet shows the remainder as losses not absorbed this year. It doesn't carry that amount forward for you.
- Companies get no worksheet, because they can't use the discount.
- If you trade crypto as a business, your profits are ordinary income rather than capital gains and the discount doesn't apply. The Australia crypto tax guide explains the difference.
The worksheet is a calculation from your records. It isn't a statement of the tax you owe, and you or your tax agent decide what goes on the return.
The rules change for later years
Legislation already passed replaces the 50% discount with cost base indexation and a minimum tax rate on capital gains from 1 July 2027. The ATO's capital gains tax reform page says the changes don't apply to the 2025-26 return and that part of the method is still being developed. The example above is for the 2025-26 income year, and the Australia guide covers the transition.
Check your own figures
Bring your exchange and wallet history into Coinfig, then look at the loss lines in the worksheet for the year. If the split between gains held over and under 12 months looks wrong, a missing purchase record is one common cause, so it's worth checking your history before reading too much into the result.
This article is general information, not tax advice. The loss figures in the example are illustrative, and Coinfig's worksheet figures are calculations from your records rather than your tax payable. A registered tax agent can advise on your own circumstances.