Mining Taxation in Canada

[VentMine]

Hello fellow Canadian miners!

Wondering how we are supposed to handle taxation on mining, let's say for personal and for business purposes? Tax season is right around the corner

If you don't claim anything for taxes then don't bother replying, I just want to know what the proper protocol is for personal use and also for business use (i.e. hosting / industrial mining farms etc).

Cheers

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[sublimus]

I would say ask your accountant but he probably wont even know what a Bitcoin is.
I read somewhere that as long as you do not change them in fiat money you dont have to report it to the Revenue.

[VentMine]

It is pretty much legal ;P

[GMPoison]

I would double check but if it's anything like the USA you have to realize the price of the bitcoin at the same time you mined it, keep a record, then report as income. How they plan on enforcing this law, I have not a clue.

[takagari]

Legally..
Any income you make, ANY is to be reported and tax to be taken..
That includes 20 bucks to shovel the old ladies driveway.

If you are smart with it, they can't track it. and frankly if we are talking a few hundred a month etc. I doubt they care.

If you own a megawatt farm. They are a bit more likely to poke.

But as far as I've seen. there's nothing out yet directly at bitcoin.

[VentMine]

Well yeah, you would be crazy to have 1+ MW farm and not voluntarily claim something... Asking for trouble from the Man.

I found some stuff about it being considered the same as barter and trade, like if you paid me in eggs I would have to put a value in $ on those eggs and report it as taxable income. Was hoping someone experienced could weigh in, am trying to learn what I would need to consider before starting a large mine.

[Amph]

Well yeah, you would be crazy to have 1+ MW farm and not voluntarily claim something... Asking for trouble from the Man.

I found some stuff about it being considered the same as barter and trade, like if you paid me in eggs I would have to put a value in $ on those eggs and report it as taxable income. Was hoping someone experienced could weigh in, am trying to learn what I would need to consider before starting a large mine.

if i was you i would only declare the amount you dump to pay the electricity what you keep as a bitcoin and not in fiat, is not really declarable, there is no way they can know how many bitcoin you mined

it's like you have found dollars on the street same thing, therefore just declare what you dump that is the simple rule

[fr4nkthetank]

There is a soft limit in Canada to declare income, for example you can make 1000$ shoveling snow, and you don't have to declare it.  Its not very high though.  I suppose you should keep all you bills for mining gear, and calculate depreciation, etc.  If its in your home, you will deduct the % of your home used for mining, so lets say 15% of the home including your "home office", where you have your computer.  Speaking of computers, that will be included too.  You will also deduct your home internet connection.  You will deduct that % off your mortgage interest payments.  Also calculated electricity cost for miners.  So if you do it properly, the business should not make profit, or just a little.  Just how it works.  did you drive to buy a GPU ?  deduct that.  So get a good accountant if you want to go that road, and be as pointy as the taxman.  Its just following rules to the letter.

edit:  If you do run it from your home, then you may have problems with your home insurance, some don't like you running a business.

[VentMine]

Cool thanks for these tips, I will keep all this in mind.

Right now it's just for curiosity sake, I'm doing up a budget for a large scale mine so just want to be realistic on my chances for success.

[Finksy]

As a general rule, if the amount you're earning doesn't warrant hiring an accountant to answer the question, don't bother.  If it does, ask someone whose job it is to know these things.  The whole you get what you pay for proverb and all.