Cryptocurrency, although relatively new, has grown in immense popularity among investors and businesses in the past few years. And as more and more Canadians are using crypto, more and more businesses are accepting crypto as a new form of payment for their products and services.

Crypto and Taxes in Canada

Cryptocurrency is generally treated like a commodity for tax purposes. Income earned from cryptocurrency transactions is generally treated as business income or as capital gains depending on the circumstances. In most cases, the sale or disposal of crypto is reported as capital gains or losses but in certain circumstances it may be reported as business income.

It is the taxpayer’s responsibility to clearly establish if a crypto transaction results in income or capital because this will determine the way the income or revenue will be treated for income tax purposes.

When crypto is used to pay for goods and services, this transaction is generally treated as a barter transaction for income tax purposes.

There are so many things to consider when it comes to taxation of cryptocurrency. Do you report the revenue from crypto as business income or capital gains? What documents do you need to keep to file your tax return? How can you optimize your tax savings for crypto transactions? Can you include your crypto with your tax planning?

If you have been using cryptocurrency, KD Professional can help you understand and comply with your tax obligations while ensuring that you are maximizing your tax savings! Having a professional guide you through the complexities of crypto taxation will also help ensure that you are prepared for any tax consequences you may encounter including dealing with the CRA! We also offer Crypto Currency consulting services through one of our accountants who is a cryptocurrency expert.

Contact us today for more information!

Do you also want to pay for your accounting services through cryptocurrency? KD now accepts cryptocurrency payments for our services!