One thing I noticed this year was how on the tax return forms there were questions actually asking if one has any types of crypto currencies as it seems like they will be deemed as taxable income per se. From the sound of it, to my understanding just owning it in general doesn\u2019t mean much as it would be like having a balance of reward points from a store. But as soon as one say turns it into cash or trades it that\u2019s when it can become taxable.<\/p>\n
As they state on its website: \u201cThe CRA generally treats cryptocurrency like a commodity for purposes of the Income Tax Act. Any income from transactions involving cryptocurrency is generally treated as business income or as a capital gain, depending on the circumstances. Similarly, if earnings qualify as business income or as a capital gain then any losses are treated as business losses or capital losses.<\/p>\n
Taxpayers have to establish if a cryptocurrency activity results in income or capital because this affects the way the revenue is treated for income tax purposes. Not all taxpayers who buy and sell cryptocurrency are carrying on business activity.<\/p>\n
When you use cryptocurrency to pay for goods or services, the CRA treats it as a barter transaction for income tax purposes. A barter transaction occurs when two parties exchange goods or services and carry out that exchange without using legal currency. For more information, please review our archived content on barter transactions.\u201d<\/p>\n
I personally haven\u2019t even entered into the crypto market yet but it\u2019s interesting to see that in terms of finance this is something to think about here in Canada. I can see why because of this a lot of people will simply mine for crypto while not actually doing anything with it which should technically avoid any tax issues. I think the assumption many people had though was that they could say just trade with bitcoins and other crypto currencies to avoid government oversight but that doesn\u2019t appear to be the case with clarification such as this.<\/p>\n","protected":false},"excerpt":{"rendered":"
One thing I noticed this year was how on the tax return forms there were questions actually asking if one has any types of crypto currencies as it seems like they will be deemed as taxable income per se. From the sound of it, to my understanding just owning it in general doesn\u2019t mean much […]<\/p>\n","protected":false},"author":1,"featured_media":13837,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[5],"tags":[8206,8205,21],"class_list":["post-13836","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-management","tag-canada-tax","tag-crypto-currency","tag-money"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.al6400.com\/blog\/wp-content\/uploads\/2022\/04\/cryptotax.jpg","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p6VnHC-3Ba","_links":{"self":[{"href":"https:\/\/www.al6400.com\/blog\/wp-json\/wp\/v2\/posts\/13836","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.al6400.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.al6400.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.al6400.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.al6400.com\/blog\/wp-json\/wp\/v2\/comments?post=13836"}],"version-history":[{"count":1,"href":"https:\/\/www.al6400.com\/blog\/wp-json\/wp\/v2\/posts\/13836\/revisions"}],"predecessor-version":[{"id":13838,"href":"https:\/\/www.al6400.com\/blog\/wp-json\/wp\/v2\/posts\/13836\/revisions\/13838"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.al6400.com\/blog\/wp-json\/wp\/v2\/media\/13837"}],"wp:attachment":[{"href":"https:\/\/www.al6400.com\/blog\/wp-json\/wp\/v2\/media?parent=13836"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.al6400.com\/blog\/wp-json\/wp\/v2\/categories?post=13836"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.al6400.com\/blog\/wp-json\/wp\/v2\/tags?post=13836"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}