Crypto or Digital Currency taxation

Gains and losses from Crypto currency should be reported on your Income Tax returns. Have a professional guide you through it’s tax implications.

Are crypto currencies taxable in Canada?

Canada Revenue Agency has a publication that classifies Crypto or digital currencies as a form of property versus a form of money. As a result, cryptocurrencies are treated like stock and its gain or losses will be reported as either capital gains or business income.

What determines if a crypto currency gains are treated as capital Gains or business income?

Capital gains and business income are taxed at different rates and as per Canada Revenue agency standards certain factors determine how it’s gains are taxed Factors to consider:

nullFrequency of Trading

nullPeriod of Ownership

nullKnowledge of Cryptocurrency market

nullTime spent on trading

nullfinancing of purchases


What if I don’t report my gains from Cryptocurrency?

As the cryptocurrency market is quite anonymous some feel that trading activities can be left undetected. However, when a taxpayer wishes to convert their cryptocurrency back into traditional forms of currency many trading platforms require the taxpayer’s identity which can be disclosed to taxing authorities. Furthermore, when the funds are to be deposited into bank accounts flags can be raised if left unreported..

What are the penalties for unreported Crypto Currency Gains?

Canada Revenue Agency punishments for unreported gains can range from 20% penalties to criminal charges of tax evasion.

Voluntary disclosure programs can assist taxpayers that failed to report previous gains voluntarily and avoid any punishment from the CRA. Voluntary Disclosures are only effective if the taxpayer has not been notified of a pending review.

When are gains from Crypto Currency recognized?

nullWhen sold for cash

nullWhen exchanged for other goods or services

nullWhen used to purchase other alternative coins

How do I calculate the gains and losses on Crypto currency?

Calculating gains and losses on Crypto currency can be a tedious task and obtaining professional help can be the best course of action. Determining the Proceeds of disposition and Adjusted Cost base has various factors to consider.

How we can Help

Our professional accountants are well versed in calculating Crypto currency transactions and determining its tax implications.

Determine if trading of Crypto Currency is considered Capital Gains or Business income.

2

Calculate the Gains and Losses as per Canada Revenue Agency standards.

3

Report on the appropriate schedules of your tax return.

Forms of Payment

We also accept Bitcoin and Ethereum as a form of payment.

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