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Author Topic: Canada ONLY: Taxes and law  (Read 11750 times)
spoonmang
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April 01, 2014, 11:15:28 PM
 #41


I tried reading that... it hurt my brain.

Lets say i bought 1 BTC in June of 2012 for $5, i then sold that 1 BTC in dec of 2013 for $1000.

Is that a capital gain or an income gain?


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dunand
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April 02, 2014, 02:52:00 AM
 #42

Your example is a capital gain.
spoonmang
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April 05, 2014, 12:55:25 AM
 #43

Your example is a capital gain.

That's what i thought.

And that's 50% of amount sold added onto your yearly income?
Or is there a bracket of its own for capital gains?

Thanks
CoinDaddy
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April 10, 2014, 05:54:18 PM
 #44

Basically the Canadian Govt. has wiped their hands of Bitcoin, saying it isn't currency.
All they want is their piece if it is used to cash out or make a purchase.
So if you buy something online, they expect the appropriate taxes to be levied by the online retailer, or upon entry to the country at customs.

Quote
"When bitcoins are bought or sold like a commodity, any resulting gains or losses could be income or capital for the taxpayer depending on the specific facts," ruled the CRA.

That section is covered in paragraphs nine through 32 of the CRA's section IT-479R, Transactions in Securities, "which provide general comments for purposes of determining whether transactions are income or capital in nature."

So if you bought $100 worth of BTC and it's currently worth $200, you don't pay anything.

However if you cashed it out at $200, THEN you would have to pay income tax on the $100 you made.

If you had taken that extra $100, and reinvested it in bitcoin, buying $200 worth of bitcoin from that initial "win" off the $100 buy-in plus the initial $100, then the value goes up to $300, then you have to pay taxes on the $100 gain.  So in the end, you pay taxes on $200 because that is how much you "made."

So, CRA only cares if you cash out, and they consider the income to be capital if you're trading and income if you're mining.
End of story... for now.
Harper and other Governments are afraid of Bitcoin.  Must be bankers whispering in their ears.

http://business.financialpost.com/2014/02/11/federal-budget-2014-puts-bitcoin-in-cross-hairs-with-new-anti-money-laundering-regulations-for-virtual-currencies/
dunand
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April 13, 2014, 03:53:13 AM
 #45

Could you please explain why it is a capital gain and note income. Also, what if it was traded a few times in and out of CAD on cavirtex over that time period, as opposed to 1 purchase and 1 sale. Would the base gain in valuation of the btc be capital and the difference in gains from trading be income? Would it all still be capital or is it all now income? All in your opinion only of course. I'm currently looking for an accountant who has some understanding of btc, but want to see what people here think and how they deal with it.

If you traded several times you will need to calculate the adjusted cost base of your bitcoins on each trade to calculate the capital gain (or loss).
http://www.cra-arc.gc.ca/E/pub/tg/t4037/t4037-e.html#P1185_82580

If you are interested I made a python script to calculate the capital gain for trades on cavirtex.  https://bitcointalk.org/index.php?topic=550294
Ann Bradshaw Byrne
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April 14, 2014, 05:38:06 AM
 #46

Good idea to revive this topic
tacotime
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April 15, 2014, 05:05:48 AM
 #47

I will publish some simple software to calculate capital gains and income from mining soon, for both the US and Canada.  Hopefully it'll help someone, and someone will help me get bugs out of it.

Code:
XMR: 44GBHzv6ZyQdJkjqZje6KLZ3xSyN1hBSFAnLP6EAqJtCRVzMzZmeXTC2AHKDS9aEDTRKmo6a6o9r9j86pYfhCWDkKjbtcns
OlliBrandt80
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April 20, 2014, 05:49:15 PM
 #48

Canadians are so lucky with their goverment! I wish I was a citizen of Canada

Bitcoin rules!
kevin1234a
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September 08, 2014, 10:28:21 PM
 #49

Read whole thread still having few questions:

If we trade BTC or hash power of various cloud mining with different wallets (paypal/okpay..) and never incash money from those wallets to canadian bank accounts; do we still have to declare it to CRA?
Nb: rmbr i mentioned paypal / ok pay wallets who can provide all monetary transactions to govt.

Second question if we do invest our monthly savings in btc with cavirtex does it mean that we are liable to pay tax on that invested amount ? Though govt already charged taxes before money reached to our bank accounts?

Most of the guys here they discussed about miners where hardware is involved but i didnt get much info about my queries so posting for any info

klondike_bar
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September 09, 2014, 10:59:16 AM
 #50

Read whole thread still having few questions:

If we trade BTC or hash power of various cloud mining with different wallets (paypal/okpay..) and never incash money from those wallets to canadian bank accounts; do we still have to declare it to CRA?
Nb: rmbr i mentioned paypal / ok pay wallets who can provide all monetary transactions to govt.

Second question if we do invest our monthly savings in btc with cavirtex does it mean that we are liable to pay tax on that invested amount ? Though govt already charged taxes before money reached to our bank accounts?

Most of the guys here they discussed about miners where hardware is involved but i didnt get much info about my queries so posting for any info

1) you declare only when you make a sale. If you bought bitcoins in 2013 you dont have to declare then until you sell them. If you sold them in 2015, you would have to declare it on the taxes done in april 2016

2) you are taxed on your income, so yes you will be paying tax. You will pay tax a second time for your capital gains/losses when you sell those bitcoins. Its no different from cashing a paycheck THEN buying bitcoins.
*however, there may be some tax benefits in direct investing from a paycheck - you might be able to cleaim bitcoins as an investment vehicle for your TFSA

24" PCI-E cables with 16AWG wires and stripped ends - great for server PSU mods, best prices https://bitcointalk.org/index.php?topic=563461 also selling 6" M-F-M PCIe splitters and PCIe-PCIe
No longer a wannabe - now an ASIC owner!
wh00per
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September 13, 2014, 02:53:58 PM
 #51

http://www.duhaimelaw.com/2014/06/22/canada-implements-worlds-first-national-bitcoin-law/

Since it came after the April posts .. here it is.

I never bought coins. I only mined .. with expenses for miners, electricity etc.

How do you declare those bitcoins when you cash them out?

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zorke
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September 13, 2014, 03:42:25 PM
 #52

Read whole thread still having few questions:

If we trade BTC or hash power of various cloud mining with different wallets (paypal/okpay..) and never incash money from those wallets to canadian bank accounts; do we still have to declare it to CRA?
Nb: rmbr i mentioned paypal / ok pay wallets who can provide all monetary transactions to govt.

Second question if we do invest our monthly savings in btc with cavirtex does it mean that we are liable to pay tax on that invested amount ? Though govt already charged taxes before money reached to our bank accounts?

Most of the guys here they discussed about miners where hardware is involved but i didnt get much info about my queries so posting for any info

1) you declare only when you make a sale. If you bought bitcoins in 2013 you dont have to declare then until you sell them. If you sold them in 2015, you would have to declare it on the taxes done in april 2016

2) you are taxed on your income, so yes you will be paying tax. You will pay tax a second time for your capital gains/losses when you sell those bitcoins. Its no different from cashing a paycheck THEN buying bitcoins.
*however, there may be some tax benefits in direct investing from a paycheck - you might be able to cleaim bitcoins as an investment vehicle for your TFSA
I wouldn't think that the fact that you are paid in bitcoin would affect your ability to invest in bitcoin via a TFSA. I believe that you simply need to have an TFSA account set up at an institution and have the financial institution invest the money in products they offer.

The only way that I can think of to invest in this kind of tax advantaged account would be to invest in the BTC EFT when it starts trading or to invest in 2nd markets bitcoin investment trust
kevin1234a
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September 13, 2014, 04:34:19 PM
 #53



1) you declare only when you make a sale. If you bought bitcoins in 2013 you dont have to declare then until you sell them. If you sold them in 2015, you would have to declare it on the taxes done in april 2016

2) you are taxed on your income, so yes you will be paying tax. You will pay tax a second time for your capital gains/losses when you sell those bitcoins. Its no different from cashing a paycheck THEN buying bitcoins.
*however, there may be some tax benefits in direct investing from a paycheck - you might be able to cleaim bitcoins as an investment vehicle for your TFSA
[/quote]

if i understood right as long as crypto remains as crypto and cloud remain at cloud we should worry about taxes unless we transfer them into any of the canadian financial institution.

Now what about the online wallets (paypal etc....) funds do we need to declare them too in tax filing?

latest article posted about the legislation of BTC and mining business is bit HEAVY!!!!

thanks guys for the info and updates

spazzdla
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September 29, 2014, 08:02:36 PM
 #54

Your example is a capital gain.

That's what i thought.

And that's 50% of amount sold added onto your yearly income?
Or is there a bracket of its own for capital gains?

Thanks


I am pretty sure you are correct with 50% of it added to your total income.

So (1000 - 5) / 2 add to yearly income.
kevin1234a
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September 30, 2014, 01:24:07 AM
 #55

funny question dont laugh pls  Grin

taxes apply to the value which had been declared as unauthorized by paypal and chargedback already?

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