Quote from: megashira1 on August 24, 2017, 02:40:23 AM

Quote from: Melfear on August 23, 2017, 11:42:12 AM

After many hours searching online, you do have to pay taxes on EVERY trade you made profit with!! Trading, for example, BTC for ETH is the same as trading BTC to CAD and CAD to ETH. You have to pay the tax on capital gain for the BTC "sell". For now i'm not sure of the method that is recommend in Canada to determine the initial value of the BTC used to buy the ETC if you have bought/acquire BTC over the time at different prices. I have found 3 ways to do this. The First In First Out, the Last In Last Out and the average buy price. I'm not sure which one to use in Canada Sad

... For tax, capital gain is taxes at your marginal rate for half the amount of gain which is calculate with a simple formula : Sell price minus fees MINUS Buy price with fees = Capital gain. Be aware that a person buying and holding for more than a year is consider a long time trader and the income is a capital gain. For those who trades (buy and sell) inside a single year, they can be flag as "professional trader" and the profit made on each trade is becoming like a job income and is all tax at your marginal rate!!

And now the disclaimer, I'm just a small trader and i'm not a financial/accountant professional in anyway, my personnal advise is if you want to be save, declare your income, pay your tax and keep proof of your trades as sign of good will. That way you will keep CRA far from you even if they ask you proof, send them and you will never hear from them again. To be sure always ask for professionnal help (wich is really hard to get for something virtual like bitcoin)!

Enjoy!

Edit : Here a link for a PDF made by 2 professionnal
Olivier Fournier. Deloitte Tax Law ll p, Montreal. Frequent
speaker, writer, and presenter at tax conferences and seminars.

John J. Lennard. Davies Ward Phillips & Vineberg ll p,
Montreal. bcomm (2007) Laurentian University; bcl , ll b
(2011) McGill University.

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&ved=0ahUKEwj8n867y-vVAhVGLSYKHR5qCH0QFgheMAc&url=https%3A%2F%2Fwww.dwpv.com%2Fassets%2F-%2Fmedia%2FF28E60C148DB463DB31E0CF66008FD2A.ashx&usg=AFQjCNE-1eNUL1Mt0Kv2W7a6nhr-jyfOnQ

"For those who trades (buy and sell) inside a single year, they can be flag as "professional trader" and the profit made on each trade is becoming like a job income and is all tax at your marginal rate!!"

Any more information regarding the definition of a professional trader? I'm sure most people within the crypto space have made trades at one time or another (just look at the trading volumes).

Does this make almost everyone within the crypto space a professional trader as per the CRA?

If people knew you would get tax'd at your marginal rate and not at the capital gains rate i'm sure many would not engage in trading to begin with.

If the CRA see's you invested into 10 Bitcoins in 2013 and now cashout 20 Bitcoins, and you show evidence that you engaged in trading to increase your total Bitcoins, does this guarantee you to be nabbed as a trader? What if you made only 1 trade? 10 trades? 100 trades?

Also, what if one has incomplete records regarding their crypto history but it is obvious that they made $ either by gambling, trading, donations et al and they now want to cash out?

I would be curious to hear from someone who has been flagged as a professional trader by the CRA unknowingly. I know this can be an issue with frequent trades made inside tax sheltered accounts such as a TFSA as well (where there would normally be no tax). It seems like the guidelines around this are verrrrry vague. I wouldn't be surprised if just a few buy/sells per day would get you flagged.