Cryptos

Frequently, we get this request. My crypto trading should be taxed as crypto investing! Certainly, most people would like their crypto investing activities to be taxed as capital gains. However, the CRA does not have a dead set date or black and white rules. Instead, it uses a guide to weigh your crypto trading activities.

Record keeping, for many years, crypto taxes and trading crypto has, for many, been the land of the free. Literally.  Governments around the world are starting or have crypto banned, regulated or legalized.  In Canada, this is not the exception.  Since 2016, the Canada Revenue Agency (CRA) has had rules around crypto how to tax currency. 

If you’re looking to use worthless NFTs to reduce your crypto tax bill, you can consider tax loss harvesting. This is a strategy where investors realize losses deliberately by disposing of their asset (by selling, swapping or spending it) in order to utilize those losses to offset against gains and reduce their overall tax liability.

The Alternative Minimum Tax (AMT) is an income tax calculation that can result in an unexpected crypto tax bill.

Canada bans trading of crypto on margin and stablecoins.  Regulator moved very swiftly; two months after the FTX implosion to protect Canadians from losing all or most of their life's savings. 

Yes, you need to disclose your crypto trades.  The CRA has been investing into tools that leverage the open nature of crypto blockchains.  The CRA is actively conducting audits of those investing and trading in crypto-assets. In a 2020-2021 report, the CRA confirmed that it is continuing to improve its crypto-related compliance efforts by implementing specific measures.