Bitcoin storms past $11,000 Signals a lost in confidence in traditional investments
- Thread starter Angstrom
- Start date
Before it crashes CRA is going to cash in too.
Trade and Barter Transactions With Virtual Currencies
Transactions made with bitcoins or other virtual currency are covered by the section of the tax code that governs barter and trade transactions. Under this portion of the tax code, you must declare any income received or expenses made, regardless of whether any actual cash was tied to the transaction.
For example, if you run a daycare and you accept eggs, bitcoins or any other type of trade in exchange for child care, you still are required to report these transactions on your income taxes. Since you can’t declare bitcoins, eggs or other material items on your tax form, you must declare the typical dollar amount that you would have otherwise claimed for those services.
If you usually charge $200 per week for daycare services, you must declare $200 as income on your return — even if you accepted different types of payment. Similarly, the person who provided you with the trade may declare the $200 as an expense on their income tax return.
Using Virtual Currency for Your Business
In some cases, regular trade and barter rules do not apply. However, if you use Bitcoin or other virtual currency systems in the operation of your business or self-employment activities, you are still responsible for claiming these purchases and payments as usual on your tax return.
To assign dollar amounts for these transactions, you must use the exchange rate between the virtual currency and the Canadian dollar on the day of the transaction.
For example, if you purchased inventory for your shop with Bitcoin and the cost was three bitcoins, you need to find the exchange rate for the day the purchase was made. If the exchange rate was $316 for one Bitcoin, your deduction for that inventory purchase would be $948.
Similarly, if you paid an employee using Bitcoin, you would have to convert the payment to Canadian dollars using the exchange rate from the day the payment was made. Your employee would have to use the exchange rate to determine how much income to declare.
Determining Capital Gains From Virtual Currencies
If you buy, hold and sell virtual currency, and make a profit in the process, you must claim that profit as a capital gains. The portion of the Canada Revenue Agency’s tax code regarding securities exchanges applies to these transactions.
For example, if you purchased 200 bitcoins for $50,000, but sold them six months later for $62,400, you would have to declare a capital gain of $12,400.
References & Resources
CRA “What you should know about digital currency”
Trade and Barter Transactions With Virtual Currencies
Transactions made with bitcoins or other virtual currency are covered by the section of the tax code that governs barter and trade transactions. Under this portion of the tax code, you must declare any income received or expenses made, regardless of whether any actual cash was tied to the transaction.
For example, if you run a daycare and you accept eggs, bitcoins or any other type of trade in exchange for child care, you still are required to report these transactions on your income taxes. Since you can’t declare bitcoins, eggs or other material items on your tax form, you must declare the typical dollar amount that you would have otherwise claimed for those services.
If you usually charge $200 per week for daycare services, you must declare $200 as income on your return — even if you accepted different types of payment. Similarly, the person who provided you with the trade may declare the $200 as an expense on their income tax return.
Using Virtual Currency for Your Business
In some cases, regular trade and barter rules do not apply. However, if you use Bitcoin or other virtual currency systems in the operation of your business or self-employment activities, you are still responsible for claiming these purchases and payments as usual on your tax return.
To assign dollar amounts for these transactions, you must use the exchange rate between the virtual currency and the Canadian dollar on the day of the transaction.
For example, if you purchased inventory for your shop with Bitcoin and the cost was three bitcoins, you need to find the exchange rate for the day the purchase was made. If the exchange rate was $316 for one Bitcoin, your deduction for that inventory purchase would be $948.
Similarly, if you paid an employee using Bitcoin, you would have to convert the payment to Canadian dollars using the exchange rate from the day the payment was made. Your employee would have to use the exchange rate to determine how much income to declare.
Determining Capital Gains From Virtual Currencies
If you buy, hold and sell virtual currency, and make a profit in the process, you must claim that profit as a capital gains. The portion of the Canada Revenue Agency’s tax code regarding securities exchanges applies to these transactions.
For example, if you purchased 200 bitcoins for $50,000, but sold them six months later for $62,400, you would have to declare a capital gain of $12,400.
References & Resources
CRA “What you should know about digital currency”
Buddy is confusing the bitcoin circumstance with his preferred virtual currency of methcoin.
Not trading at 10s of thousands of dollars, more like a point of meth trading for a hummer and detailing a car, but a similar principle all the same
Yeah, you meth addicts are an embarassment to society.
Seek help rather than my forgiveness.
Wrong. There's lots I don't know about....AGW is a prime example. In fact, I'm one of the few posters here that isn't a know-it-all. That's good because I like to mock know-it-alls.
*Hug*
Such anger...
Was anyone talking to you?
Ya see, there is the manifestation of your being so upset.... While admission of this reality is the first step in the healing process, we can all see how upset you are, especially when you take it out on yourself in the for of self denigrating commentary.