Cross Border Tax Consultants

The cryptocurrency has become a mainstream investment activity for many in recent years. Many people who held the bitcoins long ago have drastic gains when they disposed off the bitcoins at the peak in 2020. Canada Revenue Agency require all the taxpayers to report gains or losses from transactions in cryptocurrencies. During pandemic, many young investors have used their savings or benefits to buy cryptocurrencies. At end of the year, they are struggling to file taxes. Recently Canada Revenue Agency in Canada and the Internal revenue Service in the United States have joined their forces to detect the taxpayers who are hiding their income from dealings in cryptocurrencies. Taxpayers are misguided that they can hide their income from taxman if they deal in cryptos because there is no public record. That’s not true anymore. The public ledger and other sources can help taxman figure out your non compliance. Due to the cross border information exchange and tax intelligence, more and mo...

Canada taxes cryptocurrencies such as Bitcoin as a commodity. Depending on our circumstances, the resulting income is taxed as a business income or capital gain on your personal income tax return. If you hold bitcoin or other cryptocurrencies as a Capital asset, the result is going to be a Capital gain or loss. Such a gain or loss is included only half in your income. If you are running a crypto business such as trading as a day trader and have huge volumes of transactions, CRA will say it’s a business income. Soits important to consult some tax professional to determine if you are running a business or holding capital assets. If you are a cryptocurrency miner you are definitely running a business and you can treat income as a business income. Business income can be offset against other business losses as well, even your employment income. When you are running a business, you are entitled to all the deductions a business will be ordinarily allowed. Some of these transactions can ...