Digital / Cryptocurrency Tax Consultants

Consult a crypto tax advisor to navigate the complex world of crypto tax implications

Are Crypto currencies taxable in Canada?

The Canada Revenue Agency (CRA) classifies cryptocurrencies as property rather than currency. Consequently, cryptocurrencies are treated akin to stocks, and any gains or losses should be reported as either capital gains or business income for tax purposes.
Consulting for crypto tax complexities: Bitcoin coins on a laptop with glasses
Lady Carying phone in hand

What criteria determine the classification of cryptocurrency gains as either capital gains or business income in the Canadian tax framework?

Cryptocurrency gains in Canada are subject to distinct tax rates based on their categorization as capital gains or business income. Adherence to Canada Revenue Agency (CRA) standards is crucial in determining the taxation of these gains. Key considerations for this classification include:poses:

Frequency of Trading

The frequency with which cryptocurrency assets are bought and sold.

Period of Ownership

The duration for which cryptocurrency assets are held.

Knowledge of Cryptocurrency Market

Demonstrated expertise and understanding of the cryptocurrency market.

Time Spent on Trading

The amount of time devoted to cryptocurrency trading activities.

Financing of Purchases

How the purchases of cryptocurrency assets are financed.

Crypto Business Transactions

Is Crypto earned or spent as part of the business.
Ensuring precise classification is vital, as it directly impacts the applicable tax rates and obligations. Aligning with CRA guidelines is essential for tax compliance in the ever-evolving cryptocurrency landscape.

Are cryptocurrency transactions anonymous?

While the cryptocurrency market offers a degree of anonymity, it’s important to note that trading activities may not remain entirely undetected. When taxpayers seek to convert their cryptocurrencies into conventional currencies, many trading platforms mandate the disclosure of the taxpayer’s identity, potentially becoming known to taxing authorities. Additionally, when funds are deposited into bank accounts, unreported transactions can raise red flags.

What consequences arise from failing to report gains from cryptocurrency?

The punitive measures imposed by the Canada Revenue Agency for undeclared financial gains encompass a spectrum of penalties, spanning from a 20% financial assessment to the potential initiation of criminal proceedings for tax evasion. Voluntary disclosure programs have been established to provide assistance to taxpayers who have unintentionally omitted reporting their previous financial gains. These programs offer an avenue for taxpayers to rectify their reporting omissions proactively, thereby averting any potential punitive actions by the CRA. It is crucial to note that the efficacy of voluntary disclosures is contingent upon the taxpayer not having received prior notification of an impending tax audit or review.

At what point are gains derived from cryptocurrency acknowledged for tax purposes?

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

The computation of gains and losses associated with cryptocurrency can be a complex endeavour, often warranting professional guidance as the optimal approach. The determination of the Proceeds of Disposition and Adjusted Cost Base involves the consideration of multiple factors.

Purchase and Sale Prices

Consider the cost of buying and selling, including associated fees.

Hard Forks and Airdrops

Consider the value of additional units received in these events.

Quantity

Track the amount of cryptocurrency involved in transactions.

Transaction Fees

Account for fees related to buying, selling, and transferring.

Conversion Rates

Be mindful of exchange rates during transactions.

Accounting Methods

Weighted Average Cost method is used in Canada to track ACB.

Why Us

Financial Education

We prioritize educating our clients, equipping them with the knowledge to make sound financial decisions for their future success.

Seasoned Experts

Our experienced team offers deep expertise, ensuring reliable and comprehensive solutions for all accounting and tax needs.​

Personalized Solutions

Tailoring our services to each client's unique circumstances, we deliver customized solutions that address specific goals and challenges effectively.​

Modern Approach

Embracing cutting-edge technologies and innovative methods, we provide efficient and forward-thinking accounting and tax services to meet the demands of today's business landscape.​

FAQ

Cryptocurrencies are considered taxable property in Canada. They are subject to capital gains tax when sold or traded.

 Gains and losses are calculated based on the difference between the acquisition cost and the selling price of the cryptocurrency. Coins bought at different times are recorded on a weighted Average Cost basis for the ACB

There is no specific exemption for small transactions or gifts. All gains should be reported.

Using cryptocurrency for purchases can trigger gains or losses, and these should be tracked and reported on the income tax return.

Depending on the nature of your trading activity they can be reported on the investment schedules or as business income depending on the nature of activity. Bets to consult a tax professional for its treatment.

The applicable tax rates are contingent upon the specific characteristics of your trading activity, your existing tax bracket, and whether the trading occurs within your individual or corporate accounts

In general, expenses related to generating income or gains from cryptocurrencies may be eligible for potential tax deductions. However, it is advisable to seek guidance from a qualified tax professional to assess the eligibility of these expenses.

Yes, mining and staking rewards are typically considered taxable income on receipt of the rewards

The tax treatment depends on the specific circumstances of the ICO or token sale. Seek professional advice.

Yes sale of NFT is considered taxable income in Canada. Even if you ar epaid in Crypto currency.

How much does it cost to get my cryptocurrency calculation and filed?

Our Cryptocurrency Calculation and tax filing fees vary based on your crypto activities, trade volume, number of exchanges and wallets, DeFi involvement, and data accessibility. For a clearer understanding of our fee structure, schedule a complimentary 15-minute consultation.

Basic

Upto 100 trades, upto 3 centralized exchanges, upto 2 blockchains on Defi, minimal to no NFT, Staking or Yield farming

$1,000 

Expert

Upto 1,000 trades, upto 5 centralized exchanges, upto 4 blockchains on Defi, upto 100 NFT trades, upto 200 Staking or Yield farming transaction

$2,750

Premium

Upto 5,000 trades, up to 10 centralized exchanges, up to 6 blockchains on Defi, up to 1,000 NFT trades, up to 1,000 Staking or Yield farming transactions

$4,750

Custom

Fill in this questionnaire and we’ll get back to you with a quote.

Next Steps

Step 1

Please fill in this questionnaire

Step 2

Schedule a consultation with one of our CPAs to receive a final quote and a checklist of the required data

Step 3

Upload requested data onto cloud folder shared

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Markham Office
905-237-6424
675 Cochrane Dr East Tower 6th Floor, Markham, ON, L3R 0B6
Toronto Bay Street Office
416-333-1116
401 Bay Street, 16th Floor Toronto, ON, M5H 2Y4
San Francisco Office
415-366-5667
590 California Street 16th Floor, San Francisco, CA 94104
New York Office
212-651-9101
555 Madison Ave 5th Floor Manhattan,
NY 10022
Toronto King Street West Office
416-333-1116
100 King Street West, Suite 5600, Toronto, ON, M5X 1C9