What is Tax Law? | Becoming a Tax Lawyer

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Author Note

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TAXATION LAW
Table of Contents
Part A: Written Letter of advice......................................................................................................2
Tax Treatment of Cryptocurrencies.............................................................................................2
Introduction..................................................................................................................................2
Taxation in Australia....................................................................................................................2
Cryptocurrency based transactions..............................................................................................3
Exchange of Cryptocurrencies.....................................................................................................3
Tax implications in case of portfolio...........................................................................................3
Part B...............................................................................................................................................4
Income Statement under Accounting Standards..........................................................................4
Income Statement under Tax Law...............................................................................................5
Distribution Statement for each of the partners...........................................................................5
References....................................................................................................................................6

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TAXATION LAW
Part A: Written Letter of advice
Our ref: 189
Alex Perry 20th January 2020.
23/21, Opera Street,
Sydney,
New South Wales.
Dear Alex,
Tax Treatment of Cryptocurrencies
As a follow up to our previous meeting, this letter is being sent to you to explain the tax
implications of cryptocurrencies in Australia.
Introduction
As per the ATO guidelines, cryptocurrency is used to refer to a digital asset which tends
to use the Blockchain technology to prevent the generation of excessive new units and also to
verify the transactions occurring through the technology. Initially, the worry around the world
was the lack of regulations surrounding cryptocurrencies (Anthony Das, Prasad and Sadique
2018, p.7). This has been addressed of late by the ATO and rules have been formed with regards
to taxes on cryptocurrencies.
Taxation in Australia
In Australia, there has been an acknowledgement of the increasing importance of the
transactions conducted through cryptocurrencies. This term is used to mostly refer to Bitcoin and
other similar technologies with identical characteristics. The taxation on cryptocurrencies is
mostly related to the transactions occurring with cryptocurrencies and the cryptocurrencies used
as a part of the business of an entity.